Turkey’s stock market has fallen sharply as authorities moved against fund managers and asset management companies in a widening investigation into suspected share manipulation. The sell-off has been accompanied by redemption pressure on investment funds, including a case in which Pusula Portföy said it could not meet requests from investors seeking their money back.
On 16 September, the BIST 100 index fell 5.54 percent to close at 13,122.58 points. Circuit breakers halted trading for ten minutes that day. Investors withdrew as much as $1 billion from Turkish investment funds on Wednesday, as concerns spread through the country’s capital markets.
The Capital Markets Board, known as the SPK, has blocked purchases and withdrawals from funds run by Tera Portföy, Pusula Portföy and five other asset management companies. It also ordered the closure of 130 funds managed by the seven companies. Tera and Pusula together managed about $27 billion at the end of August.
Finance Minister Mehmet Şimşek convened the Financial Stability Committee before markets opened on Thursday morning. Financial police searched brokerage offices in Istanbul, while a holding-company chairman was detained.
Turkish police on Thursday detained İbrahim Bekçi, the deputy chief executive and portfolio manager at Tera Portföy Yönetimi AŞ, over suspected manipulation involving shares in Destek Finans Faktoring. The SPK referred Bekçi to prosecutors in connection with trades in Destek Finans Faktoring AŞ shares.
The regulator imposed a two-year ban on Bekçi trading on the Borsa İstanbul stock exchange and other organised markets. It also cancelled all his capital markets licences for two years. Bekçi manages Tera’s roughly 200-billion-lira TLY fund.
Destek Finans shares remain more than 300 percent higher since the start of the year, despite falling 37 percent from an early July peak. The move in the shares has become a focal point of the regulator’s investigation into trading by fund managers with large pools of assets under management.
Bekçi was among 38 people referred by the SPK to prosecutors over trading in three companies. The regulator’s 17 September bulletin described trading in Katılımevim and Gündoğdu Gıda shares as manipulative. The companies named in the inquiry are Destek Finans Faktoring, Katılımevim and Gündoğdu Gıda.
Pusula Portföy chairman Muhammed Yarız also received a two-year trading ban and a criminal referral. Pusula said it could not meet redemption requests on several funds, with its PRY money market fund identified as the most critical case.
Katılımevim, a savings-finance company with more than 102,000 active members, has lost roughly half its value in a month. The decline illustrates the pressure now facing shares linked to the investigation after earlier gains drew regulatory scrutiny.
The SPK’s actions combine restrictions on individuals, referrals to prosecutors and intervention in fund operations. Authorities have yet to establish publicly whether the suspected manipulation involved coordination among multiple fund managers or separate activity. The full losses for retail investors, the duration of the restrictions and the prospect of further charges also remain unclear.
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