Parliament passes fund liquidation law; 187 billion lira unlawful gains investigation continues

The TBMM General Assembly passed and enacted the "Law on Certain Investment Funds for Which Liquidation Has Been Decided."

The law establishes a special recovery mechanism for investment funds whose liquidation was ordered by Capital Markets Board (CMB) decisions dated 17 September 2023 and whose liquidation remains incomplete. The funds' liquidation will be conducted by the institutions responsible for liquidation under the CMB's supervision and oversight. In the six-month process to be carried out by İş Bankası and Ziraat Bankası, investors with net investment amounts below 1 million lira will receive interim payments up to that amount, and investors with 1 million lira or more will receive interim payments of up to 1 million lira.

According to the timeline, the CMB decided on 17 September to liquidate 131 investment funds belonging to TERA, PUSULA, HEDEF, ATLAS, A1, PARDUS, and BULLS PORTFÖY companies; some funds had defaulted. Before the end of September, the number of detainees in the investigation by the Istanbul Chief Public Prosecutor's Office, including company and portfolio managers and a former Central Bank deputy governor, had reached 85.

On 26 September, it was alleged that former AKP Deputy Chair and former Family Minister Fatma Betül Sayan Kaya made 21-fold returns through one fund while her spouse made 8-fold returns, with the couple withdrawing a total of 2 billion 170 million lira at the beginning of the month; Kaya stepped down without responding to the allegations. On 29 September, the Istanbul Chief Public Prosecutor's Office sent notices to relevant institutions for the freezing of assets of Kaya and her spouse İlyas Kaya.

On 30 September, an asset freeze order was issued against 30 people including Balcı and Mustafa Yazıcı, son of AKP member Hayati Yazıcı; the decision was lifted the following day, 1 October.

Ali Emre Ballı, Chairman of the Board of Management of Adil Katılım Bankası whose name was mentioned in the fund investigation, was found dead in his vehicle on 6 October. Also on 6 October, according to Anadolu Agency reporting, Sayan Kaya and her spouse İlyas Kaya applied for restitution of fund gains; the Istanbul Chief Public Prosecutor's Office sent letters to banks to permit the restitution.

On 7 October, AKP Group Chair Abdullah Güler announced that he found it unnecessary to establish a commission in Parliament for the investigation: "The judiciary is working."

On 8 October, Treasury and Finance Minister Mehmet Şimşek announced that the funds of 43 thousand fund participants had been transferred to banks, while Justice Minister Akın Gürlek disclosed on 9 October that unlawful fund gains of 187 billion lira had been identified.

On 13 October, the Communications Directorate informed that 34.1 billion lira in total from the remaining 49 funds under A1, Bulls, and Pardus companies would complete the liquidation process by the end of the week.

Under the law's provision, those involved in market manipulation, information abuse, or market fraud will not receive payments from the liquidation and recovery account.