Justice Minister Akın Gürlek spoke at the ministry regarding Türkiye's investment fund crisis. (AA Photo)
Türkiye’s investment fund crisis was not the result of mere stock market manipulation but stemmed from an extensive criminal network involving senior financial bureaucrats, Justice Minister Akın Gürlek said on Nov. 3.
“We have established that the structure we are dealing with is not limited to simple stock market manipulation or a market scam, but constitutes an extensive criminal network,” Gürlek told reporters at the ministry.
Türkiye has been grappling with a major financial crisis since mid-September, when the collapse of an investment bubble prompted market regulators to suspend and liquidate 131 manipulated investment funds.
In September, several Turkish investment funds failed to meet investor withdrawal and redemption requests, prompting the Capital Markets Board (SPK) to order the liquidation of more than 130 funds managing an estimated $18 billion to $21 billion in assets and affecting approximately 455,000 individual investors.
“Although the investigation initially focused on market participants, the stage it has now reached points to a criminal network extending into the senior ranks of the financial bureaucracy,” the justice minister said.
“We have obtained evidence of hierarchical structures and systematic cooperation among individuals within this organization.”
The minister pointed to extensive cooperation between stock market bureaucrats, those carrying out market manipulation and media outlets.
“Individuals within the mechanism controlling the money established a bribery network, rendering the oversight mechanisms designed to monitor them ineffective,” Gürlek noted.
“The network sought to corner the market by manipulating certain stocks and siphoning off liquidity from the market. By operating as a cartel, they inflicted damage on our economy.”
Gürlek said investigators were examining all connections of an organized criminal structure whose reach had been found to extend to the upper echelons of the bureaucracy, stressing that the investigation was continuing to expand.
Reminding that a total of 433 suspects face legal proceedings, he noted that 112 people have been jailed pending trial so far.
Turkish authorities on Nov. 3 also ordered the detention of six people, including a former deputy chair of the Capital Markets Board, as part of the investigation into the investment fund scandal,
The new wave of detentions came as former Borsa Istanbul Chief Executive Korkmaz Enes Ergun, who was detained earlier in the same investigation, was formally arrested on bribery charges.
