All people who profited from market abuses linked to Turkey’s multibillion-dollar investment fund scandal have been identified, Treasury and Finance Minister Mehmet Şimşek said Tuesday, promising to recover money and strengthen oversight.
“Everyone who profited from market-disrupting activities has been identified,” Şimşek told Habertürk and Bloomberg HT, without naming those involved or providing a total.
Recovery efforts would begin with people and companies that made inflation-adjusted gains of at least 10 million lira ($202,000), with legal proceedings to follow if they fail to return money voluntarily.
“Those who colluded will be pursued through their personal assets.”
The scandal emerged in mid-September when investment funds, which pool investors’ money to buy shares and other assets, could not meet withdrawal requests amid investigations into suspected market manipulation.
The Capital Markets Board (SPK), Turkey’s securities regulator, ordered the liquidation of 131 funds managed by seven companies, requiring their assets to be sold or distributed to repay investors.
Those funds had 455,758 individual investors, some of whom have since received payments.
Investigators suspect funds were used to drive up share prices, increasing the funds’ apparent value and misleading investors, while prosecutors and the SPK are examining trading in 31 companies’ shares.
The Justice Ministry put the number jailed pending trial across the fund investigation and related stock manipulation cases at 85 on October 4.
The crisis has raised questions about political connections and failures of supervision, putting pressure on President Recep Tayyip Erdoğan’s ruling Justice and Development Party (AKP).
SPK Chairman Mahmut Sütcü submitted his resignation Monday, citing health problems, and Erdoğan removed him through a decree published early Tuesday, after about five months in office.
Deputy Treasury and Finance Minister Osman Çelik also requested retirement Monday, around two weeks after his son-in-law, İskender Balcı, was jailed pending trial in a related stock manipulation investigation.
Balcı served on the board of shipbuilder Özata Denizcilik until August 31, while neither Sütcü’s departure nor Çelik’s retirement request was officially attributed to the scandal.
A separate decree removed Sütcü’s predecessor, İbrahim Ömer Gönül, from his subsequent post as head of the Public Oversight, Accounting and Auditing Standards Authority (KGK), days after prosecutors received permission to investigate his conduct at the SPK.
Former family minister Fatma Betül Sayan Kaya resigned from AKP leadership in September following allegations that she and her husband profited from stock transactions before the crisis, accusations both deny.
The AKP and its ally, the Nationalist Movement Party (MHP), have rejected opposition demands for a parliamentary inquiry into political connections and regulatory failures behind the scandal.
Şimşek announced that 66 of the 131 funds had been liquidated, along with the completion of liquidation at three fund management companies, A1 Capital, Pardus and Bulls.
Payments totaling 40.8 billion lira, about $823 million, had reached 45,747 accounts, he added.
Investors in stock-heavy funds received an average of 58 percent of their September 17 portfolio values, reflecting a decline in share prices, Şimşek said.
That 42 percent reduction is measured against the funds’ September valuations, rather than investors’ original deposits.
A bill that cleared a parliamentary committee last week would permit interim payments of up to 1 million lira, about $20,000, per eligible investor, depending on available assets.
The payments would come from fund holdings and recovered money rather than the Treasury, and the bill still requires approval by the full legislature.
Turkey would “significantly increase sanctions relating to manipulation and other market-disrupting actions” and “strengthen supervision and oversight,” Şimşek pledged.
His remarks followed a warning last week from MSCI, a US-based index provider whose stock indexes guide investment decisions by funds around the world.
MSCI restricted changes to its Turkish indexes over concerns about coordinated trading and warned that it could consider downgrading Turkey from emerging-market status if improvements are not evident by June 2027.
Şimşek expressed confidence that the measures would restore trust.
“Although the whole process was somewhat challenging … everyone with common sense says the Turkish capital markets will be much healthier,” he said.
Agence France-Presse, with reporting from Turkish Minute
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