Turkish Court Remands Senior Financial Regulators In Fund Investigation Arabian Post

(MENAFN- The Arabian Post) clearfix"> An Istanbul court has ordered four senior financial figures, including a former deputy chairman of Turkey's securities regulator, held pending trial as prosecutors broaden an investigation into alleged investment fund manipulation.

Enver Usca, formerly deputy chairman of the Capital Markets Board (SPK), was remanded in custody on Saturday alongside Ercan Urkan, a former head of the regulator's market surveillance department, and Mustafa Alper Taş, a department head at the Banking Regulation and Supervision Agency (BDDK). All three face allegations of bribery.

The fourth suspect, Ümit Sincanlı, administrative affairs director at Tera Holding, was remanded on suspicion of membership of a criminal organisation and money laundering. The decisions followed questioning by prosecutors investigating transactions involving investment funds and listed shares.

Two other former SPK officials detained during the same operation were not jailed. Kürşat Sait Babuçcu, formerly head of corporate finance, was released under judicial supervision, including a prohibition on foreign travel and a requirement to report to authorities. Former board member Bülent Murat Haholu was released after questioning.

The six had been detained on November 3 and transferred to the Istanbul courthouse on Friday. Their cases form part of an expanding investigation led by the Istanbul Chief Public Prosecutor's Office into suspected wrongdoing involving fund managers, market intermediaries and officials responsible for financial oversight.

A further operation on Saturday evening brought additional senior financial figures under scrutiny. Muhammet Erişen, deputy chairman of the BDDK, was detained, along with Bulls Yatırım chairman Kemal Akkaya and former Takasbank general manager Yunus Arıncı. Authorities also sought the detention of Ruzy Madencilik chairman Mehmed Nureddin Çevik.

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Akkaya and Arıncı had previously been questioned and released under different conditions. The fresh action extended the investigation into banking supervision, securities brokerage and the infrastructure supporting market transactions. No judicial finding of guilt has been made against the suspects.

The arrests followed the remand of Fatma Betül Sayan Kaya, a former family and social services minister and former deputy chair of President Recep Tayyip Erdoğan's governing Justice and Development Party. An Istanbul court ordered her detention on Friday over alleged breaches of capital markets legislation and membership of an organisation established to commit crimes.

Prosecutors suspect Kaya possessed non-public information capable of influencing securities prices. They have also examined alleged contacts with Emre Tezmen, a former executive at an asset management company implicated in the wider inquiry. Kaya and her husband have denied wrongdoing. Her husband, İlyas Kaya, was released under judicial restrictions.

Justice Minister Akın Gürlek said earlier in the week that 433 people were under investigation over suspected market manipulation and insider trading. He put the number remanded in custody at 112, with 186 under judicial supervision and arrest warrants outstanding for 38 others. Subsequent court decisions have increased the custody total.

The inquiry concerns trading in relatively illiquid shares held by investment funds, where limited market activity can allow substantial price movements. Prosecutors are examining allegations that coordinated transactions inflated share valuations and the reported worth of funds, before withdrawals and falling prices exposed liquidity pressures.

The turmoil became acute in September, when some funds struggled to meet redemption demands. The SPK subsequently ordered the liquidation of 131 funds managed by seven companies, setting in motion a process intended to return assets or proceeds to investors.

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The regulator's liquidation order covered funds with a combined 455,758 individual investors, although that figure does not establish how many were still awaiting repayment. Liquidators can seek to realise holdings through asset sales or distribute securities directly, making the value and liquidity of underlying shares central to the recovery process. The timetable for completing repayments remains uncertain.

Vice President Cevdet Yılmaz said on Friday that approximately 420,000 investors had received payments in cash or assets, while 179,449 had received amounts covering their principal investment. He said preparations were being made for another payment on November 13.

The inquiry has also reached the stock exchange's former leadership. Korkmaz Enes Ergun, a former chief executive of Borsa Istanbul, was remanded in custody on November 3 on allegations of accepting bribes. The accusations against individual suspects remain subject to judicial proceedings.

Opposition lawmakers have sought a parliamentary investigation into regulatory oversight, investor losses and possible political connections. A motion was rejected on Tuesday by lawmakers from the governing party and its parliamentary ally, the Nationalist Movement Party.

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