Vice President Cevdet Yılmaz gave information about the fund investigation and liquidation process at the General Assembly of the Turkish Grand National Assembly.
Arguing that there is no systemic risk in financial markets, Yılmaz said, "I would like to state very clearly that there is no systemic risk in our financial markets."
Claiming that the liquidation of problematic funds will not weaken the capital markets, Yılmaz said that the markets will continue on their way stronger after the process.
'LET'S NOT ATTRIBUTE A BIG OR SMALL MEANING TO THE PROBLEM'
Speaking about the way the fund investigation was handled in public, Yılmaz called on the media and social media.
Yılmaz said, "Please do not attribute a bigger or smaller meaning to this problem than it is."
Arguing that institutions and investment instruments that are not related to the investigation should not be damaged, Yılmaz said, "While eliminating the diseased elements that have entered the body, let's not harm the body itself."
'TREASURY RESOURCES WILL NOT BE USED'
Yılmaz announced that special losses incurred during the liquidation process of the funds will not be covered by the Treasury.
"Treasury resources will not be used for special losses incurred in this process," said Yılmaz, adding that there is no state guarantee similar to the banking system in high-risk hedge funds.
Stating that those who invest in hedge funds have the status of "professional customer" and "qualified investor", Yılmaz stated that there is a financial asset requirement of at least 10 million TL to enter these funds.
HOW WILL PAYMENTS BE MADE TO INVESTORS?
In the payments to be made to investors during the liquidation process, the relevant fund's own resources will be used first.
The resources to be recovered from those who obtain exorbitant or unfair income and the amounts to be obtained from the sale of assets taken out of the system will also be evaluated during the liquidation process.
Yılmaz explained the principles to be applied in the liquidation process of the Fund Coordination Board as follows:
No resources will be used from the Treasury.
Each fund's own resources and the amounts deposited into the opened accounts will be evaluated.
Distributions will generally be made to investors in proportion to their shares.
Interim payment will be planned for the principal amount up to 1 million TL in funds subject to extraordinary liquidation.
Small investors and money market funds will be given priority in payments.
HE REMINDED ERDOĞAN'S STATEMENTS
Yılmaz also touched upon AKP President Recep Tayyip Erdoğan's statements regarding the investigation.
Stating that action will be taken against those who are responsible and determined to have gained unfair profits through speculation or manipulation, Yılmaz said, "Whoever commits illegal actions will suffer the consequences."
Yılmaz said that in addition to the steps taken for the damaged investors, administrative and legal measures will also be taken to prevent similar incidents from occurring again.
MADOFF GIVEN EXAMPLES OF JIWASRAYA AND LIME
In his speech, Yılmaz cited the Madoff scandal in the USA in 2008, the Jiwasraya crisis in Indonesia in 2018, and the Lime fund scandal in South Korea in 2019 as examples.
Arguing that market-distorting activities can also occur in economies where control and surveillance mechanisms are strong, Yılmaz said that it is important to detect and liquidate such structures in a short time.
