Almost half a million Turkish investors, totaling 455,758, have been ensnared in a financial crisis involving the liquidation of over 100 investment funds, primarily in stock and money-market assets, valued at approximately $18 billion to $20 billion. These funds, including those managed by firms like Tera Portfoy Yonetimi AS and Pusula Portfoy Yonetimi AS, are under investigation for alleged Ponzi-like schemes that artificially inflated returns, drawing in investors hoping to beat an average inflation rate of 50% over the past three years. Many investors, like Kervanci who lost $51,000, are now struggling with the uncertainty of recouping their investments.
The crisis escalated rapidly after regulatory changes in late August, leading to a full-blown panic as funds struggled to meet withdrawal demands. Investors pulled about 600 billion liras from investment funds between August 31 and September 23, and the Borsa Istanbul All Shares index fell 12% in less than two weeks, with some 50 stocks plummeting 40% or more. The Capital Markets Board (SPK) ordered the liquidation of 131 funds run by seven firms, extending the selling period from three to six months to mitigate further price declines.
Authorities have taken swift action, arresting Emre Tezmen, chairman of Tera Yatirim Menkul Degerler AS, along with four others, including Tera board members and the chairman of Pusula Finans Holding, on charges of alleged stock manipulation. Finance Minister Mehmet Şimşek stated that the affected funds represent only 10% of the sector and does not expect the crisis to spread across Turkey's financial markets, emphasizing that the problematic area has been “quarantined.” Despite this, investors remain anxious, with some having lost up to 90% of their initial investments, and the exact amount they will recover remains unclear.
