The chief executive of Istanbul Stock Exchange (Borsa Istanbul) Korkmaz Enes Ergün has been detained on suspicions of bribery and participation in a criminal organization. The arrest was carried out on October 31 as part of a large-scale investigation into suspected abuses on the Turkish capital market, Reuters reports, citing the Turkish state agency Anadolu.
According to information from the Istanbul Chief Public Prosecutor's Office, Ergün is suspected of membership in an organization created for the purpose of committing crimes, as well as of corrupt acts. He has held the position of chief executive of the exchange since 2021. At the time of the initial reports, representatives of Borsa Istanbul had not commented on the detention.
The case is the latest stage of an investigation into a scandal that shook Turkish financial markets in September. At the time, the Capital Markets Board (SPK) ordered the liquidation of 131 investment funds managed by seven companies after some of them encountered difficulties repaying investors' funds.
According to Reuters, the affected funds managed assets worth around $18 billion, while the number of investors holding stakes in them reached nearly 456,000.
At the heart of the crisis are suspicions that share prices were artificially inflated through concentrated purchases by investment funds. According to the Financial Times, some of the companies built up substantial positions in companies with limited free float, leading to a sharp rise in share prices and an increase in the reported value of the funds. When investors began withdrawing their funds en masse, some fund management companies proved unable to meet redemption requests.
The crisis caused serious upheaval on the Istanbul Stock Exchange and forced the Turkish authorities to take emergency measures to ensure liquidity and limit the risk to the financial system.
According to the Turkish publication Hürriyet Daily News, more than 110 people have already been arrested as part of the investigations. Meanwhile, the authorities have begun making payments to affected investors in stages. As of October 30, the total amount of payments made had reached 97.3 billion Turkish lira, covering nearly 300,000 investors in 100 funds.
The scandal also took on political dimensions. In early October, former Turkish minister Fatma Betül Sayan Kaya and her husband were named as suspects in the investigation. Kaya stepped down from her posts in the ruling Justice and Development Party to allow an investigation into the allegations against her.
Amid the turmoil, President Recep Tayyip Erdoğan also made personnel changes in financial supervision. In a decision published on November 1, Muhsin Atıcı was appointed chairman of the Capital Markets Board, while Ersin Başar Ekmekçi became his deputy.
The expanding investigation is placing additional pressure on the Turkish authorities, which are trying to restore the confidence of international investors and stabilize the financial system. According to the Financial Times, the scandal creates new risks for the country's economic policy and the reputation of Turkish capital markets.
Ergün's detention is part of an ongoing investigation, and the suspicions reported so far do not constitute proven guilt.