AKP President Recep Tayyip Erdoğan said that the Turkish economy was 'robust' and that those involved in 'manipulative transactions' would be held accountable, at a time when the government was trying to contain the effects of the $18 billion stock market scandal.
Erdogan, in his statement after the long cabinet meeting on Monday night, stated that the government was working to "prevent a similar problem from occurring again".
John Paul Rathbone from the British Financial Times newspaper wrote in his article titled "Erdogan is trying to limit the effects of the $18 billion stock market scandal." He focused on the political dimension of the incident, publicly known as the 'fund scandal'.
Here are the highlights from that news...
AKP DEPUTY CHAIRMAN RESIGNED
On Sunday, AKP Deputy Chairman and former Family Minister Fatma Betül Sayan Kaya resigned from her post after it was alleged that she and her husband made millions of dollars by trading in the shares of one of the companies involved in the scandal.
Erdogan said, "Necessary investigations are being carried out against those who engage in manipulative transactions to gain unfair profits. Those who are found to engage in market-distorting activities through these funds will be held accountable."
Kaya, on the other hand, claimed that he submitted his resignation to Erdoğan in order to ensure that his position would not be the subject of discussion during the investigation and "to protect the healthy conduct of the process."
"IT MAY AFFECT SUPPORT FOR ERDOĞAN"
The process, publicly known as the 'fund crisis', started when the funds managed by Tera Portföy could not meet the repayment demands of investors.
The problem then spread to other portfolio management companies. Regulatory authorities had to intervene when money was quickly withdrawn from the funds.
The financial crash affected the savings of more than 450 thousand investors in 131 funds. Analysts assess that the heavy losses that investors may face may affect support for Erdoğan among voters tired of years of high inflation and falling real wages.
"There is a growing perception that Erdoğan or his close associates are aware of manipulative practices," Istanbul-based GlobalSource Partners analyst Atilla Yeşilada said in his assessment to the FT.
Yeşilada said that the resignation of the party deputy chairman "strengthened this perception".
ARREST ORDER FOR THE GROOM
On Monday, prosecutors issued an arrest warrant for İskender Balcı, who until recently served as an independent board member of one of the companies linked to the scandal.
It was stated that Balcı, who surrendered to the authorities on the same day, was the son of a former board member of Türkiye's banking regulatory agency BRSA and the son-in-law of Deputy Minister of Treasury and Finance Osman Çelik.
Balcı, on the other hand, said that he was a non-executive independent board member of the company he worked for and that he had no authority over daily activities or share transactions.
Stating that he repeatedly expressed his 'deep discomfort' to the board of directors when he learned about some share price movements, Balcı stated that he eventually resigned from his position.
Other prominent figures, including a university president and a former ambassador, also served on the boards of companies linked to the case, according to the FT.
BANKS ACTIVE
The government acted quickly to limit the financial impact of the scandal.
The authorities assigned İş Bank and the public bank Ziraat Bank to liquidate the affected funds and distribute the resulting income to investors.
According to the FT, this process can take up to 6 months.
On Monday, Borsa Istanbul's indicator index BIST 100 lost 2 percent of its value. Thus, the total decrease in the index reached approximately 11 percent in the 2-week period when the turmoil in the markets accelerated.
However, foreign exchange markets remained calm. According to the news, there was no significant movement indicating that worried Turkish savers were turning to the dollar.
"THERE IS NO PROBLEM IN OUR ECONOMY"
Vice President Cevdet Yılmaz, in his statement to business world representatives on Saturday, said, "There is no problem in our economy."
