Istanbul (AFP) – A Turkish former minister and senior ruling party official was placed in detention pending trial on Friday as part of an investigation into a multi-billion-dollar investment fund scandal, state news agency Anadolu reported. Fatma Betul Sayan Kaya was remanded in custody by an Istanbul court on charges of “violating the capital markets law” and “membership of an organisation established for the purpose of committing crimes,” it said.
Kaya served as families minister from 2016 to 2018 and until recently was a deputy chair of President Recep Tayyip Erdogan’s ruling AKP. She stepped down from the party role on September 26 after an opposition lawmaker sought clarification over claims she and her husband had made substantial profits through transactions involving shares which they allegedly offloaded before the scandal broke.
According to the prosecutors’ referral document quoted by Anadolu, Kaya is suspected of having access to insider investment information. It said she knew Erdin Ozel, a manager of the Tera Group, one of the firms at the heart of the investigation, and had been in touch with him “intensively” during the investment process. Tera Group had invested heavily in shares in shipbuilding firm Ozata Denizcilik, it said.
– Suspect share sale –
Prosecutors said Kaya had invested in Ozata Denizcilik “in April 2026 and the shares were sold on September 16,” a day before the scandal hit the headlines. The crisis erupted when several funds were unable to satisfy investor redemption demands, prompting the Capital Markets Board (SPK) to place seven companies into liquidation on September 17. The companies managed 131 investment funds with assets reportedly worth $17 billion.
Prosecutors said proceeds from selling Ozata Denizcilik shares were normally settled within two business days, but in Kaya’s case, they were sold through a transfer arrangement and the balance credited to her account the same day. “It appears the suspect knew the likely price movement range of the stocks and also carried out transactions knowing that the liquidation decision would be taken,” the prosecutors’ document said.
– Market manipulation probe –
In September, an opposition Yeni Parti MP sought clarification over claims Kaya invested 63 million lira ($1.3 million) in Ozata Denizcilik shares in April and sold them in September, earning a profit of around 1.3 billion lira ($26.5 million). At the time, the MP also raised questions about her husband Ilyas Kaya, who allegedly invested 100 million lira and earned back 826 million lira.
The pair were called in for questioning by investigators on Thursday, with Turkish media saying she was quizzed for over nine hours. Overnight, a court placed her under arrest but granted her husband conditional release. It also granted conditional release to former SPK boss Ibrahim Omer Gonul, whose four-year tenure ended in April and who is also under investigation, it said.
Since mid-September, prosecutors have been looking into allegations of widespread market manipulation affecting the savings of nearly half a million investors. On Tuesday, Justice Minister Akin Gurlek said 112 people had been jailed pending trial in the scandal. He said investigators had uncovered a “comprehensive criminal network” that infiltrated the highest levels of Turkey’s financial markets.
© 2024 AFP
