Turkish prosecutors have arrested more than 45 people in an investigation into suspected stock market manipulation involving investment fund managers. Authorities have frozen the assets of 42 individuals and 46 legal entities, the Justice Minister Akin Gurlek said on social media platform X. The Istanbul prosecutor’s office is looking into alleged fraud, violations of capital market law and the forming of a criminal organisation.
Funds closed and shares removed
The Capital Markets Board (CMB) has closed funds run by seven asset management companies. Those funds include 131 investment funds planned for liquidation. Authorities will sell the underlying assets and distribute the proceeds to unit holders in proportion to their holdings.
The liquidation deadline has been extended from three months to six. The extension is meant to limit selling pressure on markets. Twenty-seven shares will be removed from the BIST 100 index from 1 October.
Scale of the affected funds
Two funds managed by Tera hold total assets of about 6.5 billion euros. The case involves 455,000 investors. Assets may not cover all investor claims, analysts said.
Aysel Gundogdu, an independent financial adviser in Istanbul, said the crisis goes beyond liquidity. She pointed to weaknesses in management and supervision. Money market funds are more likely to be recovered than hedge and equity funds holding problematic shares.
Market and political fallout
The BIST 100 index fell 6 percent in one day in mid-September. It later lost about 12 percent over several trading days. A senior politician from the ruling Justice and Development Party (AKP) has resigned in connection with the affair.
Turkish inflation stands near 30 percent.
