Turkey's market regulator announced the liquidation of some funds managed by seven asset management companies, including Tera Portfoy and Pusula Portfoy. This decision followed the failure of three asset managers to meet redemption requests on certain funds, which triggered a significant market selloff. The Capital Markets Board suspended several investment funds with a combined value of $21.4 billion, according to Reuters.
In response to the market turmoil, the regulator also filed criminal complaints against dozens of individuals and imposed trading bans due to alleged share-price manipulation. Specifically, criminal complaints and two-year trading bans were issued against some fund managers at Pusula Portfoy and Tera Portfoy, involving shares of Katilimevim, Gundogdu Gida, and Destek Finans Faktoring AS. This swift regulatory action aims to address the issues at the heart of the investment fund industry's recent shake-up.
Adding to the regulatory crackdown, Turkish authorities detained several top finance executives and issued travel bans as part of an investigation into the mass outflows from some funds. Muhammed Yariz, Chairman of Pusula Portfoy Yonetimi AS, was arrested. The Financial Stability Committee, chaired by Treasury and Finance Minister Mehmet Simsek, convened and affirmed that there is no fundamental or structural risk to Borsa Istanbul or the country’s capital markets, characterizing the problem as concentrated, temporary, and manageable. They pledged to implement all necessary measures to alleviate liquidity constraints and prevent contagion, while also vowing to act decisively against market-disruptive activities.
