President Recep Tayyip Erdoğan’s ruling party and its nationalist ally on Tuesday again blocked a parliamentary inquiry into Turkey’s investment fund scandal, rejecting opposition demands to investigate political connections and regulatory failures behind a crisis affecting funds that had nearly half a million investors.
Lawmakers from the ruling Justice and Development Party (AKP) and its ally, the Nationalist Movement Party (MHP), defeated motions from four opposition groups, the ANKA news agency reported.
AKP parliamentary group leader Abdullah Güler had argued on October 7 that a parliamentary commission was unnecessary for now because the judiciary was investigating the scandal.
The crisis erupted in mid-September when some investment funds, which pool money to buy shares and other assets, could not meet investors’ 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 on September 17, requiring their assets to be sold to repay investors.
Those funds had 455,758 individual investors, a count that does not represent the number still awaiting repayment.
Opposition İYİ (Good) Party lawmaker Erhan Usta renewed accusations that regulators ignored warnings about manipulation, citing a February 2025 prosecutors’ letter and remarks by Finance Minister Mehmet Şimşek in November 2025.
He accused the İstanbul Settlement and Custody Bank (Takasbank) of admitting a fund managed by Tera Portfolio Management to Turkey’s national fund trading platform without SPK approval, allowing its investor count to rise from 161 to about 111,000.
“While the public was being robbed, some people added to their fortunes,” Adalet Kaya, a lawmaker from the pro-Kurdish Peoples’ Equality and Democracy Party (DEM), told parliament.
Justice Minister Akın Gürlek has said investigators identified 141 individuals and 73 companies that allegedly obtained unjust gains totaling 187.6 billion Turkish lira ($3.8 billion) through funds managed by Tera, Pusula and Hedef.
Demands to investigate political connections have focused in part on former family minister Fatma Betül Sayan Kaya, who left the AKP leadership in September after allegations that she and her husband had profited from share transactions before the crisis.
The couple was questioned as suspects and denied wrongdoing, while the AKP confirmed last week that Kaya was no longer a party member.
Financial restrictions on Kaya and her husband, İlyas Kaya, had been lifted after payments were made into voluntary repayment accounts, the government-aligned A Haber broadcaster disclosed on Wednesday.
The İstanbul Chief Public Prosecutor’s Office confirmed on Tuesday that asset restrictions continued for 109 suspects and acknowledged that institutions had received notices that omitted earlier decisions lifting restrictions on other people.
The office explained that it had sent corrective notices after discovering the omission and that the correspondence did not represent a new restriction order.
The criminal investigation also led to the jailing of former deputy agriculture and forestry minister Mustafa Aksu pending trial on Monday, with his assets and those of his wife seized.
Aksu previously disclosed an investment of about 100 million lira ($2 million) in a Tera fund and described himself as a victim unable to withdraw his money.
Erdoğan on Monday pledged that eligible investors would begin receiving interim payments this month once parliament passes the legislation.
Along with the criminal investigation, parliament’s Planning and Budget Committee on Wednesday began considering a nine-article AKP bill setting rules for liquidating the funds, recovering losses and making payments to investors.
Ersan Aksu, an AKP lawmaker sponsoring the bill, told the committee that repayments would come from fund assets and money recovered from those responsible, with no Treasury or budget funding.
The proposal would permit interim payments of up to 1 million lira ($20,000) per eligible investor, based on money paid into a fund minus withdrawals, with advances deducted from final settlements.
If cash is insufficient, the regulator could prioritize investors with the smallest net contributions or set a lower payment amount, so the ceiling does not guarantee that every investor will receive 1 million lira.
Where fund assets fall short, the calculation of investors’ net contributions would account for inflation, while interim advances would use contributions without that adjustment.
The bill would also formalize voluntary repayment of gains exceeding benchmark returns and authorize the Savings Deposit Insurance Fund (TMSF), the state agency managing assets under trusteeship, to sell certain seized assets before trials conclude.
Payments have already begun under existing liquidation rules, with Ziraat Bank transferring 6.4 billion lira ($130 million) to 43,643 investors in funds managed by A1, Bulls and Pardus last week.
The government aims to complete liquidation of the three companies’ remaining 49 funds by the weekend, bringing cash payments and asset transfers across their 66 funds to 40.5 billion lira ($820 million) for 45,745 investors.
Interim payments from the other 65 funds would follow enactment of the legislation, the presidency’s communications directorate announced after a meeting chaired by Vice President Cevdet Yılmaz on Tuesday.
Ersan Aksu told lawmakers that legal action had been taken against 282 people, with 84 jailed pending trial and warrants issued for 27 suspects.
He put the affected funds at 7.7 percent of total fund assets and argued that the crisis did not pose a systemic risk to the financial system.
To limit risks spreading from the funds, Turkey’s central bank supplied funding, eased borrowing and collateral conditions and increased securities purchases, Governor Fatih Karahan explained during a presentation in Bangkok on Wednesday.
Karahan maintained that fund withdrawals had not significantly weakened residents’ preference for lira-denominated assets.
Calls for accountability have also come from Erdoğan’s religious support base, with the Aziz Mahmud Hüdayi Foundation, linked to the Erenköy religious community, blaming the fund crisis on failed oversight, tolerance of wrongdoing and favoritism.
“Those who stay silent on corruption, favoritism and violations of others’ rights lose the right to speak of morality,” the foundation said in its Tuesday declaration.
The foundation demanded accountability regardless of who was responsible, extending its criticism to corruption in public institutions, municipalities, property development, business and civil society.
The declaration was endorsed by Mahmut Asmalı, chairman of the high advisory council of the Independent Industrialists and Businessmen’s Association (MÜSİAD), a business organization that has supported Erdoğan’s government.
Reporting on the scandal’s political connections has brought criminal proceedings against journalists and an AKP damages claim against two journalists, a broadcaster and an opposition spokesman.
The party is seeking 1.6 million lira ($32,400) from journalists Timur Soykan and Şaban Sevinç, the BirGün TV broadcaster and Zeynel Emre, spokesman for the main opposition New Party, over allegations it says harmed its reputation.
Trade Minister Ömer Bolat also filed a criminal complaint over a broadcast questioning his connections to the scandal.
An İstanbul court jailed Sevinç and Sözcü newspaper editor Mustafa Balcı pending trial on October 9 on accusations of publicly disseminating misleading information, while journalists İsmail Saymaz and Murat Ağırel were put under house arrest the following day.
The Committee to Protect Journalists (CPJ) urged their release on Monday, warning that at least 22 journalists had been arrested or detained under Turkey’s disinformation law this year.
Prosecutors also opened an investigation on Monday into people who shared documents marked confidential from the fund inquiry, without identifying those under investigation or specifying the documents.
On Wednesday Halk TV’s live programming was cut short after discussion of the fund scandal’s political connections as police raided the opposition broadcaster and state-appointed trustees assumed control.
The takeover arose from a separate investigation into station owner Cafer Mahiroğlu over allegations of bribery, bid rigging and money laundering.
New Party leader Özgür Özel questioned the timing, citing demands for accountability over the fund scandal along with a corruption trial in which jailed İstanbul Mayor Ekrem İmamoğlu, an Erdoğan rival, began his defense on Wednesday.
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