ISTANBUL, Sept. 23 (Xinhua) -- Türkiye is taking a series of measures to contain the fallout from a major investment fund crisis that has triggered a sharp stock market sell-off, fund liquidations and a widening investigation.
The developments have raised concerns among nearly half a million investors and prompted high-profile arrests.
The full scale of the investor base affected by the liquidation became clearer on Wednesday. The country's Capital Markets Board (SPK) said 455,758 unique investors were registered in the 131 funds involved in the crisis.
The funds, managed by seven portfolio management companies, were ordered to be liquidated on Sept. 17.
The SPK urged investors to rely solely on official statements amid conflicting reports, stressing its commitment to protecting investor rights and maintaining confidence in the capital markets.
The crisis stems from alleged stock market manipulation that created the appearance of rapid and substantial gains, attracting retail investors.
Resat Yilmaz, a gold trader and financial expert at Istanbul's Grand Bazaar, highlighted the devastating consequences for retail investors.
"The number of victims is truly very high. We witnessed shares intrinsically worth 5 liras (about 0.1 U.S. dollars) suddenly pumped to 500 liras through aggressive manipulation," Yilmaz told Xinhua.
Investors were trapped when the scheme eventually collapsed, he said. "The financial cost to these small retail investors has been devastating."
Yilmaz warned of broader macroeconomic consequences, particularly the flight of foreign investment.
"Developing countries like ours rely heavily on foreign capital. The panic and manipulation we witnessed create significant hurdles for foreign investors. This is a very painful period for our national market," he said.
However, Yilmaz expressed confidence that the Turkish authorities would implement strict regulatory measures to restore market trust.
Regulators extended the liquidation period for the affected funds from three to six months, citing the funds' portfolio structures and market conditions and allowing their assets to be sold under more favorable conditions.
Clarifying this process, capital markets lawyer Yalcin Ozge Okat explained that fund liquidation differs from a standard corporate bankruptcy.
Speaking to a local broadcaster, Okat noted that the process involves selling off the funds' assets, calculating debts and receivables, and distributing the remaining balance to investors.
He said investors' legal rights remain intact, though exact payment timelines depend on forthcoming SPK regulations.
The liquidation process comes as a criminal investigation widens following a sharp sell-off on Borsa Istanbul last week. The benchmark BIST 100 index plunged more than 7.5 percent at one point, sparking concerns over market stability.
In recent days, Turkish authorities have detained or arrested dozens of suspects, including high-ranking fund management executives.
Authorities have also frozen assets, imposed travel restrictions and blocked social media accounts as part of the investigation into suspected illicit gains. ■
