Turkey detains five as part of fund liquidation investigation, ministry says

Turkish authorities detained five people ​as part of an ​investigation launched after ‌some investment funds ​defaulted on redemption requests, the justice ministry said on Saturday. Authorities intervened this week to ‌shore up market stability after a liquidity crunch at investment funds triggered a sharp selloff in Turkey's benchmark stock index. The measures helped the index ‌recover some of its losses.

As part of the intervention, ‌the Capital Markets Board mandated Isbank and Ziraat Bank to oversee the liquidation of 131 investment funds managed by seven portfolio management companies, including Tera Portfoy, Pusula ⁠Portfoy ​and Hedef Portfoy, on ⁠the TEFAS electronic fund platform. The ministry said in a statement that Pusula ⁠Holding Chairman Serdar Turhan, Tera Yatirim Holding Chairman Emre Tezmen and three fund ​administrators had been detained as part of the investigation.

It said four ⁠other suspects had already been arrested and all other suspects identified by the ⁠Capital ​Markets Board had been barred from leaving the country and had their assets frozen. Finance Minister Mehmet Simsek said on Friday that ⁠the liquidation of investment funds worth $18.3 billion would not put pressure on Borsa ⁠Istanbul because ⁠regulatory changes should prevent any contagion risk. He said authorities would continue to monitor the market closely.