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Turkish authorities have detained 15 suspects over alleged market fraud involving shares of Katilimevim, a Borsa Istanbul-listed interest-free savings financing company, as part of a wider crackdown on financial market manipulation, according to the Istanbul Chief Public Prosecutor’s Office.
The suspects were taken into custody by financial crimes officers from the Istanbul police after financial data requested from the Financial Crimes Investigation Board (MASAK) was reviewed and investigators identified findings pointing to alleged market fraud at the company, according to the statement.
Justice Minister Akin Gurlek said judicial proceedings had been launched against 25 suspects in the investigation into Katilimevim shares, with 15 detained and efforts continuing to locate the 10 suspects who remain at large.
Gurlek added that the financial and property assets of executives and officials linked to Pusula Finans Holding, Tera Yatirim Holding, Hedef Holding and Bulls Yatirim, along with their securities and asset-management subsidiaries and investment and real-estate company Ufuk Yatirim Yonetim ve Gayrimenkul, have been frozen as part of the financial investigation.
The restrictions also cover transactions that could reduce the assets of board chairmen and members, authorized signatories, their spouses and first-degree relatives at the companies under investigation, unless carried out with the knowledge and view of the chief prosecutor’s office.
The investigation follows a decision by Türkiye’s Capital Markets Board (CMB) last week to file criminal complaints against 37 people over its findings on Katilimevim and Gundogdu Gida shares. The regulator also filed a complaint against one additional person over its findings on Destek Finans shares.
The scrutiny focuses in part on the unusually large positions held by investment funds managed by companies linked to the groups under investigation, raising concerns about concentrated ownership and trading in relatively illiquid shares.
Such concentrated buying can push up the prices of stocks with limited free float, increasing the value of the same shares held by the funds and boosting their reported returns.
The three shares also recorded exceptionally strong gains before the latest sell-off, with Katilimevim gaining more than 1,500% over the 12 months to Aug. 27, before the CMB introduced tighter rules aimed at limiting concentrated positions.
After Pusula Portfoy, which manages funds holding a major stake in the company, struggled to meet investor redemption requests last week, Türkiye's state-owned Emlak Katilim said it had begun talks to acquire Katilimevim and Birevim.
The broader investigation, which centers on alleged manipulation in parts of the fund and equity markets and was launched after several funds defaulted on investor redemption requests, had already led to the detention of Tera Yatirim Holding Chairman Emre Tezmen, Tera Yatirim Holding board member Emre Alkin, independent board member Kerem Alkin, Tera Portfoy General Manager Alper Ozturk and Pusula Holding Chairman Serdar Turhan. Police also searched the offices of Tezmen and Ozturk.
On Sunday, Doga Sigorta Chairman Nihat Kirmizi and Tera Yatirim board members Bulent Uygun and Abdulkadir Ozkan were detained, bringing the number of suspects detained in the investigation to eight at that stage.
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