Turkey lifts asset freezes on 46 companies in market probe, media reports

Turkey lifted asset-freeze orders imposed on 46 companies under an investigation into investment funds, media reported on Monday, after a senior figure from President Tayyip Erdogan's party resigned amid ‌the crisis. The Istanbul chief prosecutor's office said in a statement the decision was taken following new assessments and notifications from the country's Capital Markets Board (SPK), NTV and other media reported.

The crisis has hit Turkish markets, with Istanbul's main BIST 100 index down 2.7% after a loss of 2.9% the previous week. The index has fallen back to ‌levels last seen in early March. Turkey's five-year sovereign CDS spread, a key measure of perceived default risk, rose 1 basis point from Friday's close to around 250 ‌basis points, its highest level since May, data from S&P Global Market Intelligence showed.

Almost half a million investors hold stakes in more than 100 Turkish investment funds worth around $20 billion which authorities ordered to be liquidated earlier this month during the market selloff. Finance Minister Mehmet Simsek said legal proceedings against those involved in market-disrupting transactions were continuing, adding that the government is protecting the rights of fund ⁠investors amid ​the crisis.

"Simsek continues to spread a safety ⁠blanket across Turkish financial markets amid the ongoing Fund collapse saga," said RBC Bluebay strategist Tim Ash. "I personally think there is an underlying push here for a more fundamental reform around Turkish capital markets." DEPUTY ⁠CHAIR OF ERDOGAN'S PARTY RESIGNS

At the weekend, a deputy chair of President Erdogan's AK Party, Fatma Betul Sayan Kaya, resigned from her party posts after an opposition politician alleged ​that she and her husband made substantial profits from trading Ozata Denizcilik shares ahead of the market turmoil. Kaya said on X that she considered it ⁠necessary to take political responsibility while the allegations were examined and asked Erdogan to relieve her of all the posts she holds. She did not comment further on the specifics of the allegation.

The crisis ⁠erupted ​after suspected price manipulation in a number of thinly traded stocks triggered heavy losses and redemption pressures at investment funds, prompting emergency measures by regulators to support financial stability. The companies affected by the prosecutor's statement were among dozens of legal entities, investment funds and individuals whose assets were frozen as investigators examined large ⁠stock market transactions carried out between July, when the funds reached peak assets under management, and September 16, the day before the SPK ordered the liquidation of ⁠scores of funds during a liquidity crisis.

Justice ⁠Minister Akin Gurlek said last week investigators were scrutinising large share purchases and sales during that period under a probe into alleged market manipulation. Authorities had frozen the assets of 46 companies, 18 funds and 42 individuals and imposed overseas travel ‌bans on 37 people.