Türkiye forms board to speed up fund repayments

ANKARA

This photo shows the Directorate of Communications headquarters. (AA Photo)

Türkiye has set up a board led by Vice President Cevdet Yılmaz to accelerate the liquidation of troubled investment funds and payments to investors, the Communications Directorate announced on Sept. 29.

The Fund Coordination Board was formed after President Recep Tayyip Erdoğan met with his economic team and senior regulators in Ankara. The liquidation covers 131 funds run by seven portfolio management companies, with 455,758 investors, according to the Capital Markets Board (SPK).

At the meeting, the SPK presented a repayment roadmap for investors whose holdings had been verified.

Payments will depend on the funds’ assets and liquidity, the directorate said. The statement gave no payment dates.

Erdoğan stressed that protecting investors’ rights under capital market rules and ensuring fair payments as quickly as possible were the priorities.

Under the liquidation rules, proceeds from asset sales and maturing investments will be distributed in proportion to investors’ holdings. The banks overseeing the process must take market conditions and investors’ interests into account when selling assets.

The SPK extended the liquidation period from three to six months to allow assets to be sold on more favorable terms, but said the process could finish earlier.

Eral Karayazıcı, head of fund management at Inveo Portföy, told daily Hürriyet that limiting investors’ losses depended on selling assets at prices close to normal market levels. Liquidators needed sufficient time to do so, he said.

The SPK ordered the funds into liquidation on Sept. 17 after defaults and delays in payments to investors seeking to redeem their holdings. The affected funds are closed to new purchases and redemptions.

İşbank is handling the affected Tera Portföy funds, while Ziraat Bank is responsible for those managed by Pusula, Hedef, Atlas, A1 Capital, Pardus and Bulls Portföy.

At Erdoğan’s instruction, the State Supervisory Board (DDK) has begun reviewing recent investment fund transactions.

Its chairman, Salih Tanrıkulu, said the review also covered oversight activities.

The directorate said further administrative and legal measures were planned to strengthen capital market supervision and prevent similar problems.

Officials also briefed Erdoğan on the planned transfer of savings finance companies Katılımevim and Birevim, and İktisat Katılım Bank, to Türkiye Emlak Katılım Bank.

In the criminal investigation led by Istanbul prosecutors, former SPK Chairman İbrahim Ömer Gönül has been summoned for questioning as a suspect on Sept. 30.

Authorities also seized five villas valued at about 1.2 billion Turkish Liras.

Investigators linked the properties, registered in other people’s names, to Pusula Portföy Chairman Muhammed Yarız and Pusula Holding Chairman Serdar Turhan. Both men have been remanded in custody.

An arrest warrant was issued for businessman Cengiz Avcı, who is abroad.

Investigators allege that Avcı earned about 15 billion liras from trading Odine shares over the past year and converted about 12 billion liras into cash, withdrawing it from the capital markets.

Avcı left Türkiye after the transactions, media reports said. His bank accounts, properties and other identified assets were seized.