Turkish Finance Minister Mehmet Şimşek said 161 billion lira has been paid so far to 444,987 people. The payments cover 119 of the 131 ordinary and extraordinary investment funds placed under liquidation. The liquidation began on 17 September.
Şimşek gave the breakdown in a television interview on Kanal 7. Ordinary liquidation accounts for 68 billion lira, paid to 55,821 people across 94 funds. Extraordinary liquidation accounts for 93 billion lira, paid to 415,955 people across 25 funds, as of Friday.
Recovery accounts and the process
Seven portfolio management companies were involved, four under ordinary liquidation and three under extraordinary liquidation. The Savings Deposit Insurance Fund, TMSF, holds refund and recovery accounts totalling 35.6 billion lira. Of that, 2.6 billion lira is held as cash.
Şimşek said 99.9 percent of ordinary liquidation is complete. He said about 456,000 individual customers were in the funds. Of those, 371,021 have received their full net investment.
Market fallout and the wider economy
Şimşek said the fund problem feeds into the economy first through the wealth effect. Emerging market stock exchanges fell between 16 September and 13 November. Turkey’s index declined 9 percent in that period, against 21 percent in South Korea and 17 percent in Indonesia.
He rejected the claim that the funds had vanished. “It is described as if everything in the funds disappeared, nothing will be paid, there is no such thing,” he said. He added that if uncertainty eases, the Turkish stock exchange could return to its 16 September level within three to five months.
Legislation and financing
A new legislative proposal on fund markets is expected to go to parliament soon. Şimşek said a lasting reform should take shape by mid-December. He also said 25 tax inspectors have been moved from the Treasury and Finance Ministry to the Capital Markets Board.
Şimşek pointed to financing from multilateral development banks. He said Turkey has obtained more than $50 billion over the last three years. Ten loan agreements worth $5.1 billion were signed on the margins of the COP31 conference in Antalya.
