A major market manipulation scandal in Turkey has led to the liquidation of 131 investment funds, impacting approximately 455,000 investors.

A market manipulation scandal has impacted roughly 455,000 investors in Turkey, causing a significant drop in the BIST 100 index. Authorities have arrested over 45 individuals, including investment firm executives, and frozen the assets of 42 people and 46 legal entities. The crisis has also prompted the resignation of a high-ranking official from the ruling Justice and Development Party (AKP).

Investigation and Regulatory Response

The Capital Markets Board (SPK) has intervened by shutting down the funds of seven asset managers, including Tera, Pusula, and Atlas. State-run news agency Anadolu reports that 131 funds are currently being liquidated. The Istanbul Public Prosecutor's Office is investigating allegations of fraud, violations of capital markets law, and the formation of a criminal organization. Justice Minister Akin Gurlek stated that the investigation centers on allegations that firms artificially inflated fund values using worthless "junk stocks."

Impact on Investors and Accountability

The liquidation process, which involves selling fund assets to distribute proceeds to investors, has been extended from three to six months to mitigate fire-sale risks. Financial experts warn that assets may not cover all investor claims, noting potential structural failures in management and oversight. Meanwhile, the opposition plans to bring a motion for a parliamentary investigation to determine if other politicians were involved in the scandal.

Political Resignation

Fatma Betul Sayan Kaya, a deputy party chair and former minister of family affairs, resigned from her posts following allegations regarding stock transactions made by her and her husband, Ilyas Kaya. In a social media statement, she noted that political responsibility exceeds legal responsibility and that her position should not hinder the ongoing investigation.