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 issued a statement saying the decision was taken after 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 to levels last seen in early March. AUTHORITIES ORDERED LIQUIDATION OF 100-PLUS FUNDS

Turkey's five-year sovereign CDS spread, a measure of perceived default risk, rose about 5 basis points from Friday's close to around 254 basis points, its highest since May, ‌data from S&P Global Market Intelligence showed. Almost half a million investors hold stakes in more than 100 Turkish investment funds that authorities ordered to be liquidated this month during the market ‌selloff. The funds were worth about $20 billion.

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 in 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."

Speaking after a cabinet meeting in Ankara, Erdogan said the government was working ⁠to ensure ​that all necessary steps were being taken, adding that work ⁠was under way to implement measures to prevent such a problem from happening again. "The problem in question has taken place in a limited part of the fund market. There is no risk that has spread to our financial system," he said. "The ⁠Turkish capital market is resilient, its foundations are strong."

Erdogan also said he would meet his economic team and representatives from the relevant institutions on Tuesday to discuss the matter, adding that the government would not allow people's rights to ​be violated. DEPUTY CHAIR OF ERDOGAN'S PARTY RESIGNS

At the weekend, a deputy chair of 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 posts ⁠she ​holds. She did not comment further on specifics of the allegation.

Erdogan said on Monday that his government would never defend those who violate people's rights, but he did not name Kaya specifically. 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 that investigators were scrutinising large share purchases and sales during that period under an investigation 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.