Everyone who invests their money in Turkey wants one thing above all else - for it to retain its value. And this is not easy in the context of inflation reaching 30 percent. Therefore, many, who are already struggling with the consequences of the economic crisis, are buying gold, currency or stocks, and increasingly also shares of exchange-traded funds promising high returns.
But it is the stock market that has become a trap for many Turks. In mid-September, the main BIST 100 index collapsed by 6% in just one day, and in total it lost 12 percent in several days. The cause of the collapse was a serious scandal caused by manipulation. Nearly 455,000 investors were affected, more than 45 people were arrested, and a high-ranking politician from the ruling Justice and Development Party resigned. Here are the five main issues related to the scandal:
What exactly happened?
It all started with some investment funds starting to experience difficulties in paying out investors' amounts in a timely manner. Among those affected were the funds of the companies „Pusula Portföy" and „Tera", with around 6.5 billion euros invested in the latter alone.
The financial supervision authority SPK then intervened and closed seven funds, including „Tera", „Pusula" and „Atlas". According to information from the Anadolu Agency, 131 funds are to be liquidated. The Istanbul prosecutor's office is now investigating fraud, violations of the capital market law and the creation of a criminal organization, Justice Minister Akan Gurlek announced. The suspicion is that the fund companies artificially inflated the value of the funds, which actually contained shares without coverage.
Among the 45 people who have been arrested so far are also representatives of the managements of investment companies. In addition, the assets of 42 people and 46 legal entities were frozen. The consequences on the Istanbul Stock Exchange were not long in coming: 27 shares dropped from the leading BIST 100 index.
Will investors get their money back?
The funds will be liquidated: their assets will be sold, and the proceeds will be distributed among investors according to the number of their shares. The deadline for this has been extended from the initial three to six months. Financial consultant Aysel Gündogdu told DW on this occasion that this should reduce the pressure to sell so that the shares are not sold at too low prices. But this does not mean that the liquidation of each of the funds will last six months - they can be closed faster depending on the market situation.