Turkish investigations into the former head of the Capital Markets Authority amid the investment funds scandal

The repercussions of the investment funds crisis in Turkey are expanding to include former supervisory officials, with the Public Prosecution requesting an investigation into the former head of the Capital Markets Authority on suspicion of misuse of office, while the number of those arrested in the case has risen to 85 people.

Turkish prosecutors have requested permission to investigate the former head of the Turkish Financial Markets Authority, Ibrahim Omar Gonul, on suspicion of misuse of office, in the latest development in an investment funds scandal that has shaken the country's financial markets since mid-September.

Anka News Agency quoted a letter sent by prosecutors to the Ministry of Treasury and Finance on September 30, stating that there were “clear and sufficient indications” of Gonul’s failure to fulfill his responsibilities during his term as head of the Capital Markets Authority, which lasted 4 years and ended last April.

The Turkish Capital Markets Authority is responsible for protecting investors and ensuring that capital markets operate in a fair, transparent and efficient manner.

The crisis erupted in mid-September when several investment funds announced their inability to meet investors' redemption requests amid a wave of selling in the markets, which led to a sharp decline in the main index of the Istanbul Stock Exchange.

The next day, the Capital Markets Authority suspended the trading of 131 investment funds on the “Tevas” electronic platform, and decided to liquidate them.

These funds are managed by 7 portfolio management companies, and the value of the assets under their management amounts to about $17 billion, while the authority said that more than 455,000 individual investors were affected by the crisis.

The authorities are investigating accusations of widespread market manipulation, while an Istanbul court, on Saturday, ordered the imprisonment of 20 new suspects pending trial, bringing the total number of detainees in the case to 85 people.

The scandal also led to the resignation of a prominent figure in the ruling Justice and Development Party and a former minister, amid accusations that she had gained from the crisis.

Turkish President Recep Tayyip Erdogan said on Saturday that the priority is “preventing harm to the Turkish economy,” stressing that the authorities will work to hold accountable everyone who obtained illegal gains, while preserving the rights of all parties.

The Saudi main market index (TASI) ended Sunday trading up by 1.09 percent, closing at 10,505.84 points, in the first trading session after Saudi Tadawul began implementing the updated market orders mechanism.

“Raydan” stock topped the highest gain, after rising by 9.97 percent to 18.97 riyals, followed by “Abu Moati” stock, rising by 7.69 percent to 32.78 riyals, then “Armah” stock by 6.69 percent to 65.35 riyals.

On the other hand, “Enaya” stock led the decliners, falling by 3.94 percent to 10.24 riyals, followed by “Lubref” stock, down by 2.58 percent to 124.70 riyals, then “MIS” stock by 1.80 percent to 284 riyals.