(Sept 21): Turkiye froze assets tied to executives at several investment firms, expanding an investigation into a fund-industry crisis that has already triggered redemption failures, arrests and a sharp selloff in stocks.
The measures cover executives linked to firms including Tera Yatirim Menkul Degerler AS, Pusula Finans Holding AS, Hedef Holding and Bulls Portföy Yönetimi, Justice Minister Akin Gurlek said in a post on X. Authorities also moved to restrict asset transfers involving board members, signatories and some of their relatives without prosecutors’ approval.
The move deepens a crackdown that followed turmoil across Turkiye’s fund industry, where several asset managers failed to meet redemption requests last week, triggering a stock-market rout and prompting regulators to order the liquidation of 131 funds managed by seven firms.
“This will be a serious test of confidence in both investment funds and market oversight,” said Mehmet Gerz, the chief executive officer of Istanbul-based Osmanli Portfoy.
Authorities detained several high-profile finance executives over the weekend, including Tera chairman Emre Tezmen and board members Emre Alkin and Kerem Alkin. Pusula Holding chairman Serdar Turhan was also detained while local media reported the arrest of Destek Finans Faktoring AS chairman Altunc Kumova.
Judicial proceedings have been initiated against 25 people, Gurlek wrote, adding that 15 have been taken into custody “and efforts to apprehend the 10 fugitive suspects are ongoing”.
Turkiye’s benchmark Borsa Istanbul 100 Index fell 1.0% at 2.05pm Istanbul time (7.05pm Malaysia). The broader Borsa Istanbul All Shares Index, down 2.2%, continues to fare worse.
Shares of hundreds of smaller companies outside the main index were tumbling anew on Monday, with about 100 of them falling by the daily limit of 10%.
Stocks that were held in some of the largest funds of Tera and Pusula continued to take the largest hit. Destek, owned by Tera funds, contributed the most to the All Share index’s decline. The company’s chairman, who became one of the country’s richest people as the share price soared, has been arrested, local media reported.
Turkiye’s wealth fund last week bought shares through an exchange-traded vehicle run by state-owned brokerage Ziraat Portfoy that tracks the country’s 30 biggest public companies, people familiar with the matter said Friday.
Some of the investment funds began to unravel after Turkiye last month tightened rules on their exposure to related parties and concentrated investments. Funds like Tera’s flagship vehicle had poured billions of lira into a tight circle of related companies, many of them highly illiquid, and amplified the bets with borrowed cash.
Late Sunday, the Capital Markets Board extended the liquidation period for the affected funds to six months from three, saying the change was intended to allow assets to be sold “under the most favourable terms possible.”
The crisis has triggered heavy investor withdrawals and a sharp decline in assets under management. Turkish investment funds’ total assets shrank by 510 billion liras (RM42.61 billion) between the end of August and Sept 18, according to data on Turkiye’s Central Securities Depository website.
The meltdown erased about US$51 billion (RM207.96 billion) from the value of Turkish stocks last week as the All Shares index fell 10%, the biggest slump since March 2025.
“The nervousness looks likely to persist for a while,” said Altug Ozaslan, founder of independent advisory firm Fortuna Capital. “The Turkish market is essentially living day to day right now.”
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