Fund bill sets out repayment terms for affected investors

ANKARA

About 350,000 investors in funds under liquidation could recover their net principal through advance payments of up to 1 million Turkish Liras under a bill before parliament, ruling Justice and Development Party (AKP) parliamentary group leader Abdullah Güler said.

Güler put the number of affected investors at roughly 455,000, explaining that inflation compensation would be calculated separately at the final settlement.

“Think of it as an advance payment,” he said.

Under the proposal, investors whose net investment is below 1 million liras could receive that amount, while those with larger investments could receive an advance capped at 1 million liras. Payments would depend on available assets and verified entitlements.

If available cash is insufficient, the Capital Markets Board (SPK) could prioritize investors with the smallest balances or set a common minimum advance.

Where fund assets fall short of the value of investors’ holdings, repayment calculations would use actual cash invested and withdrawn, adjusted for inflation through the liquidation date.

The adjustment would reflect the average change in the consumer price and domestic producer price indices, with withdrawals deducted from the earliest investments first.

Further payments would follow as assets are sold and money recovered.

Güler said no public funds would be used.

The bill also addresses responsibility for losses caused by unlawful transfers of fund assets.

The portfolio management company that founded or managed the fund would bear primary liability. If recovery from the company proved impossible, other individuals and entities found responsible by the SPK could be held personally liable.

Leaving office would not remove responsibility for transactions and decisions made during their tenure.

The Savings Deposit Insurance Fund (TMSF) would collect recovered money in separate accounts for each fund.

Where appointed as trustee, it could sell seized assets before the conclusion of court proceedings.

Investors found by the SPK to have participated in market abuse or acted with those responsible would be excluded from repayments.

Justice Minister Akın Gürlek told daily Sabah that investigators had identified more than 187 billion liras in allegedly unlawful gains made by 141 individuals and 73 companies through Tera, Pusula and Hedef funds.

He said their details had been sent to the TMSF, which had begun issuing repayment notices.

The nine-article bill, submitted on Oct. 9, covers funds ordered into liquidation by the SPK on Sept. 17 whose liquidation remains unfinished when the legislation takes effect.

Güler said the proposal was scheduled for consideration by parliament’s Plan and Budget Commission the following week, before proceeding to the General Assembly.