Turkish authorities have arrested Emre Tezmen, Chairman of Tera Yatirim Holding, along with other executives, as part of a widening investigation into a fund-industry crisis. The arrests are linked to a market manipulation probe involving over $18 billion in assets and affecting more than 350,000 investors. The Justice Minister, Akin Gurlek, announced that asset transfers of board members, signatories, and some of their relatives are also being restricted without prosecutor approval.
The scandal began when investment firms like Pusula and Tera Yatirim faced redemption failures, leading to a sharp sell-off in the Turkish stock market and a liquidity crunch. Regulators have since ordered 131 investment funds into liquidation, meaning their assets will be sold to return proceeds to investors. Among those detained are Muhammed Yariz of Pusula Portfoy and Altunc Kumova of Destek Holding, both of whom have been jailed.
The crisis has been compared to a Ponzi scheme, similar to Bernie Madoff's, where funds bought illiquid shares to artificially inflate their values and attract new investors. Warnings about potential market manipulation had been raised months prior by global index provider MSCI. Although the Finance Minister downplayed the systemic risk, the BIST-100 index initially fell more than 5% before recovering with government intervention. Authorities have now frozen assets tied to executives at Tera Yatirim Menkul Degerler AS, Pusula Finans Holding AS, Hedef Holding, and Bulls Portföy Yönetim.
