Turkish authorities have arrested Emre Tezmen, chairman of Tera Yatirim Menkul Degerler AS, along with four other individuals, including Tera board members Kerem Alkin and Emre Alkin, Tera Portföy general manager Alper Öztürk, and Pusula Finans Holding chairman Serdar Turhan. This comes as part of a widening investigation into a financial scandal involving 131 Turkish funds, valued at over $18 billion, which have been characterized as Ponzi-like and impacted approximately 455,758 investors. The crisis began when some funds, particularly those run by Tera Portföy and Pusula Portföy, struggled to meet investor withdrawal requests, leading to a liquidity crunch.
The Capital Markets Board (CMB) has ordered the liquidation of these 131 funds, managed by seven portfolio management companies, after they failed to meet redemption requests on September 15-16. These funds held large stakes in shares that were difficult to sell quickly without significantly driving down prices. To mitigate this, the regulator extended the liquidation period from three to six months on September 21, aiming to sell assets under the most favorable conditions. İşbank and state-owned Ziraat Bank have been appointed to oversee the liquidations, with investors expected to receive proceeds proportional to their holdings, though the final recovery amount remains uncertain.
The funds involved represent about 10% of Turkey's financial sector, with Finance Minister Mehmet Şimşek stating the affected area has been "quarantined" to prevent broader market contagion. The crisis has drawn comparisons to Bernie Madoff's Ponzi scheme due to the apparent high returns attracting new investors, while the underlying assets were illiquid and difficult to value accurately. The investigation into alleged market manipulation is ongoing, with more arrests made earlier in the week, including Muhammed Yariz, chairman of Pusula Portfoy, and Altunc Kumova, chairman of Destek Holding.
The overall value of the 131 funds ordered into liquidation was estimated at over $18 billion ($18.3 billion according to the Finance Minister), with some estimates based on September 17 figures putting it at more than ₺800 billion ($16.4 billion). The scandal has affected nearly half a million individual investors. This event caused the BIST-100 index to fall more than 5% on September 20, triggering a market-wide circuit breaker, although the index later rebounded after authorities announced supportive measures.
