Türkiye: Turkish stock exchange boss in custody – financial scandal widens

With the arrest of the deposed Istanbul stock exchange boss Korkmaz Enes Ergun, the billion-dollar stock exchange scandal continues to make waves in Turkey. Ergun is being investigated for “membership in an association formed to commit crimes” and “bribery,” the state news agency Anadolu reported.

Shortly afterwards, Justice Minister Akin Gürlek said that investigations into the stock market scandal had shown that it was not just a simple stock market fraud, but “a comprehensive criminal organization”.

The stock market scandal in mid-September presumably arose because investment funds were said to have manipulated share prices. The Turkish financial supervisory authority then ordered the liquidation of 131 funds, affecting around 455,000 investors. Investigations, numerous arrests and dismissals from the financial regulator and the Ministry of Finance followed.

A law passed at the end of October is intended to regulate the winding up of the affected funds and gradual repayments to investors; full reimbursement is not yet guaranteed.

The focus now is on the question of how such transactions were possible over a long period of time and whether the responsible supervisory authorities intervened sufficiently. Economic commentator Necmettin Batırel told the pro-government platform TGRT that investigations against the market's top manager would fundamentally shake investor confidence. Such serious allegations against the stock exchange management could lead to a withdrawal of foreign capital.