Turkish prosecutors asked lenders to hand over assets of the ruling party’s former deputy chair in the course of a funds-rout investigation that’s reached the top of President Recep Tayyip Erdogan’s political establishment.
The request followed a review of an application submitted by the AK Party’s Fatma Betul Sayan Kaya and her husband under a voluntary payment mechanism, according to the state-run Anadolu Agency. The Istanbul Chief Public Prosecutor’s Office later requested transfer authorizations from accounts the couple had identified, Anadolu said.
The mechanism is part of an unusual solution Turkey proposed last week to stem the fallout of a crisis in which some high-profile funds offering extraordinary returns began failing redemption requests and triggered an investor rush to pull out money. The program, spearheaded by the market regulator, asks investors who made “excessive gains” to voluntarily return some money to help compensate investors stuck in frozen funds.
Five people have so far voluntarily deposited “excessive fund profits” to bank accounts controlled by Turkey’s Savings Deposit Insurance Fund, the country’s Justice Minister Akin Gurlek said in an interview with Anadolu on Tuesday. The government also launched legal process for return of an unspecified amount of money that was transferred to Switzerland, he said.
Kaya, a former family minister, resigned as AK Party deputy chair in late September after opposition allegations that she bought 63.4 million liras ($1.3 million) of Ozata Denizcilik Sanayi ve Ticaret AS shares in April and sold them for about 1.34 billion liras in September after the stock surged more than 23-fold. Ozata shares were also traded actively by one of the failed asset managers.
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The funds scandal, which the justice minister has said included “Ponzi-like schemes,” has triggered wide-ranging investigations of alleged fraud and money laundering.
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The rout erupted in September after two asset managers, Tera Portfoy Yonetimi AS and Pusula Portfoy Yonetimi AS, failed to meet redemption requests. Turkey’s market regulator ordered 131 funds into liquidation and authorities arrested dozens of financial executives, including the chairs of Tera Group and Pusula Finans Holding AS.