The former head of the Istanbul Stock Exchange, Korkmaz Enes Ergun, has been arrested as investigations into a major Turkish financial scandal continue. State news agency Anadolu reported that he is under investigation on suspicion of bribery and membership in an organization established to commit crimes.
Justice Minister Akin Gürlek said the inquiry had found evidence pointing to what he described as a “comprehensive criminal organization,” rather than a simple case of stock market fraud.
The scandal emerged in mid-September amid allegations that investment funds had deliberately manipulated share prices. Turkey’s financial regulator subsequently ordered the liquidation of 131 funds, affecting around 455,000 investors. The case has also led to arrests and dismissals at the financial regulator and the finance ministry.
A law passed at the end of October is intended to govern the liquidation of the affected funds and provide for repayments to investors in stages. Full reimbursement has not been guaranteed.
The investigation has raised questions about how the alleged transactions continued over an extended period and whether oversight bodies intervened adequately. Economic commentator Necmettin Batırel told the pro-government platform TGRT that an investigation involving the market’s top executive could seriously undermine investor confidence and potentially prompt foreign capital to leave.
President Recep Tayyip Erdoğan has described the matter as a problem limited to a part of the capital markets, saying it poses no risk to Turkey’s financial system or economy.
Sources: Handelsblatt.