Turkey passes fund liquidation law as many savers still await access to money

Turkey's parliament ‌has approved ​legislation governing the liquidation of frozen investment funds, but the law leaves uncertainty over compensation for many investors whose savings have been locked up for more than a month. The law, passed on Thursday evening, establishes ‌a framework for repayments after regulators ordered the liquidation of the funds last month, with payments adjusted for inflation and interim payouts of up to 1 million lira ($20,110).

However, it remains unclear how much investors with larger holdings will ultimately recover from fund assets that authorities suspect were manipulated and inflated in price. "I ‌went to bed rich and woke up poor," said Enes Kilic, a 29-year-old engineer from Istanbul who said he invested about 5 million lira ‌across several of the funds, including proceeds from selling gold savings.

He said he had planned to use the money to buy a home for his family and submitted a sell order on September 16, a day before the announcement of defaults and the liquidation process. 'NOT TRANSPARENT'

The legislation prioritises the protection of small investors and sets rules for payments to ⁠hundreds of ​thousands of investors who have not been ⁠able to access their money. On Tuesday, Finance Minister Mehmet Simsek said the liquidation of funds managed by four of seven companies would be completed soon and that, under the ⁠law, some 390,000 investor accounts would receive repayments.

Many investors say they remain uncertain over when they will be repaid and how much they will recover. "We heard about advance ​payments, there is no information on how much of a payment we will receive. The process is not transparent. What if there ⁠is no money left in my funds?" Kilic said.

Another investor, a 40-year-old who asked not to be named, said she invested proceeds from the sale of a home to care for her ⁠husband, ​who was diagnosed with cancer. Without social security coverage after moving from France to Turkey, the family has been paying for treatment out of pocket, exhausting much of their savings, she said, adding the family had more than 10 million lira tied up in the funds.

"This money is ⁠not just a number. It means hope, health and our future," she said. "A full month has passed and we have been surviving on credit ⁠cards. If payments are delayed much ⁠longer, my husband's treatment could be interrupted." Nearly half a million investors held stakes in more than 100 investment funds that regulators ordered liquidated in September. Authorities say the liquidation process has been completed for 84 of the 131 ‌initially frozen funds and ‌payments have been made to their investors.

($1 = 49.7262 liras)