Arab News | Turkiye freezes ex-minister’s assets as fund scandal grows

ISTANBUL: Turkish prosecutors have moved to freeze the assets of a senior governing party official and former minister who resigned at the weekend over allegations she profited from an investment fund crisis.

The move involved the assets of Fatma Betul Sayan Kaya, a senior figure in President Recep Tayyip Erdogan’s ruling AKP, and came on the eve of the reopening of parliament after the summer recess.

Turkiye has been wrestling with the fallout from an investment fund scandal that erupted this month with the collapse of what officials have called a “Ponzi-like” scheme.

Kaya said late on Saturday she was resigning as one of AKP’s deputy chairs after Turkiye’s main opposition Yeni Parti alleged she and her husband made millions trading shares within just five months, suggesting she had benefitted from insider information.

While admitting nothing, Kaya — who was Turkiye’s family minister from 2016 to 2018 — said she was taking “political responsibility” to ensure that any investigation could be conducted “independently, impartially”.

In a statement late Tuesday, prosecutors said they had sent “a letter concerning the freezing of all assets” of Kaya and her husband, Ilyas Kaya, to “all the relevant institutions”.

– ‘Robbery of the century’ –

On Saturday, Yeni spokesman Gokhan Gunaydin said the party was seeking clarification over claims that Kaya invested 63 million lira ($1.3 million) in shares in April and sold them in September, earning a profit of around 1.3 billion lira ($26.5 million).

He also said her husband had allegedly invested 100 million lira and earned back 826 million lira, collectively netting the pair an alleged profit of nearly 2.2 billion lira ($45 million).

Gunaydin said it was “clear” Kaya had received insider information and pledged that the party would unveil more names this week.

Several Turkish media sites said Kaya had given back the money she made, and has not yet been detained over the affair.

“This name is the tip of the iceberg,” Yeni leader Ozgur Ozel told a party meeting on Wednesday, describing the scandal as “the robbery of the century”.

The investment fund crisis is expected to dominate the agenda in parliament, which reopens on Thursday afternoon with Erdogan expected to give an address ahead of an evening reception.

– ‘AKP is a clean party’: Erdogan –

Justice Minister Akin Gurlek said investigators were looking into 217 suspects, of whom 56 had been remanded in custody while another 88 were granted conditional release.

He said prosecutors were looking into “26 stocks deemed to be subject to speculative and manipulative transactions” along with the activities of “accounts that generated gains at an extraordinary rate over a short period of time”.

On Tuesday, Erdogan held a three-hour meeting with economic aides over the fund crisis, after earlier defending his party’s record.

“The AK Party is a clean party, just as its name suggests; it is a party true to its name. No one can tarnish this party’s purity or stain that cleanliness,” he told party cadres.

“Without looking at their own pitch-black records, they even try to give us lessons in morality and political ethics. ‘Get lost,’ I tell them,” he said of his political opponents.

But Ozel hit back on Wednesday.

“In the AK Party’s crooked system, neither your freedom, nor the money in your bank account, nor your right to information is safe,” he said.

The crisis erupted in mid-September when several funds said they were unable to satisfy investor redemption demands, sending Istanbul’s main stock exchange tumbling.

A day later, regulators moved to address the crisis by placing seven companies into liquidation that hold 131 investment funds, whose assets are reportedly worth around $17 billion.

Turkiye’s Capital Markets Board (SPK) has said more than 455,000 individual investors have been affected.