Vice President Cevdet Yılmaz said on Tuesday that Türkiye's capital markets would emerge stronger once the problems in certain investment funds are resolved, cautioning against creating the impression that the whole market is under suspicion.
"Capital markets are extremely important and valuable in our development process," Yılmaz said in a statement on the social media platform X. "With the overcoming of the problems that have recently emerged in certain funds, our capital markets will continue on their way more strongly."
The fund scandal hit the headlines just over a month ago, prompting prosecutors to open an investigation into allegations of widespread market manipulation.
It began when several investment funds were unable to satisfy redemption demands, with regulators placing seven firms into liquidation that manage 131 investment funds. Some 455,000 individual investors have been affected.
Yılmaz, who chairs the Fund Coordination Board overseeing the liquidations, said the body is working intensively. He said administrative and judicial measures are being carried out with determination and in coordination.
So far, 85 people have been arrested in connection with the affair, according to the Justice Ministry.
Funds under ordinary liquidation have begun paying investors, while a bill setting rules for extraordinary liquidation is before Parliament and is due to be debated this week.
Ordinary liquidations are proceeding quickly and the legal provisions for extraordinary liquidation are on Parliament's agenda, Yılmaz said. He added that efforts are underway to bring unjust and excessive gains back into the system and use them to pay investors.
Distorting measures harms investors
Yılmaz said it is wrong to distort the measures taken against abusers and manipulators in a way that casts suspicion on all capital markets and on healthy funds.
President Recep Tayyip Erdoğan said this week that turning the problem in 4.6% of funds into an attack on all capital markets would undermine the economy.
He recalled that about 10 months ago he had objected to the perception that certain rules adopted for some abused funds applied to the whole market, and had stressed the importance of sound economic communication.
He said he holds the same view today. The perception that measures against troubled funds target the funds that "operate in compliance with the rules and account for more than 90% of the market, is causing harm to the system and to investors."
Yılmaz said the government is acting like someone removing diseased structures without harming the body. "Whenever there is a concrete problem, it is essential that the relevant authorities address that problem or the problematic funds."
Investing not crime
Yılmaz stressed that investing in funds, shares or other capital market instruments is not a crime, but a policy supported in all of the government's plans and programs. But unlawful transactions, disrupting the market, fraud and manipulation are crimes, he said.
Failing to make this distinction clearly would hurt both investors and the economy, he said, adding that anyone who has acted or acts unlawfully must face the consequences.
"It is the shared responsibility of all of us, particularly independent regulatory and supervisory authorities, to protect employees who comply with the rules, the system as a whole, and the rights of investors," Yılmaz wrote.