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Turkish authorities arrested 11 more suspects, including former Central Bank deputy governor Erkan Kilimci, in a probe into capital market irregularities that came after some funds failed to make redemption payments.
Kilimci, who was serving as a board member at Tera Yatirim, whose subsidiary Tera Portfoy was among the portfolio management companies whose funds defaulted on redemption payments, also served as a Central Bank deputy governor from 2016 to 2018.
The latest arrests brought the number of people detained in the investigation to 45 out of 69 suspects under investigation, including Tera Yatirim Chairman Emre Tezmen; Tera executives Alper Ozturk, Emre Alkin and Kerem Alkin; and Pusula Holding Chairman Serdar Turhan.
The broader investigation was launched with the detention of Pusula Portfoy Chairman Muhammed Yariz on Sept. 14 and widened after some funds managed by Pusula and Tera defaulted on redemption payments.
After the benchmark BIST 100 index closed 6% lower on Sept. 16, Türkiye's Financial Stability Committee, led by the Treasury and Finance Ministry, convened on Sept. 17 and attributed the problems to credit and liquidity difficulties affecting some funds managed by a limited number of portfolio management companies.
As part of the measures taken at the meeting, the Capital Markets Board (CMB) suspended trading in 131 funds managed by seven portfolio management companies and appointed Is Bank and Ziraat Bank to oversee their liquidation.
The CMB also filed criminal complaints over suspected market manipulation involving shares of Katilimevim, Gundogdu Gida and Destek Finans Faktoring, prompting prosecutors to launch proceedings against dozens of suspects.
The investigation subsequently expanded to financial transactions involving executives at Pusula, Tera, Hedef and Bulls, with prosecutors asking MASAK to examine their account movements and overseas money and cryptocurrency transfers dating back to 2024.
Separately, the Financial Crimes Investigation Board (MASAK) has frozen about ₺387.5 million in fund accounts, while freezing and seizure measures cover about ₺750 million ($15.3 million) in cash assets overall.
Meanwhile, President Recep Tayyip Erdogan also addressed the investigation Thursday, telling journalists at Türkiye House in New York that authorities would hold anyone responsible legally accountable.
"There is no risk to either our financial system or the Turkish economy," Erdogan said, adding that portraying the issue as a problem across the entire market would be unfair to the Turkish stock market. "I want it to be known that whoever is responsible will be held accountable before the law," he added.
The CMB initially set a three-month maximum period for liquidating the affected funds but later extended it to six months, citing their portfolio structures and market conditions. The regulator said the process could be completed earlier.
The CMB also indicated that 455,758 unique investors hold stakes in the 131 funds subject to liquidation, with the funds estimated to hold more than ₺800 billion in assets as of Sept. 17.
Türkiye’s Central Securities Depository (MKK) announced on Thursday that final payments will depend on the prices at which the funds’ assets are sold. For sell orders executed before the liquidation but not yet settled, the price on the sale date will apply.
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