Turkey stock market scandal leads to arrests of top managers of investment companies

On September 23, Turkish authorities arrested Emre Tezman, chairman of Tera Investment Holding, on suspicion of fraud and deception of investors. He was detained on September 19, along with other top managers of Tera, as well as investment company Pusula Holding. A total of 15 people were detained.

In the middle of last week, Pusula said that some of its funds are unable to pay investors on time when repaying the shares. Concerned private shareholders rushed to withdraw their savings from all of the company's mutual funds. Tera said two of its funds also failed to make payments on time. The total assets under management of these companies was about $29 billion. The case of Tera and Pusula funds stems from a broader investigation into operations in Turkish capital markets. Goldman Sachs analysts say that in the first week of September, funds were withdrawn from the financial markets of the country by $ 1.8 billion. As part of the investigation, Turkish authorities froze assets associated with several financial firms and limited the ability to transact. The prosecutor’s office also requested data on money and cryptocurrency transfers abroad made since 2024 to establish whether there was a targeted withdrawal of assets from the country.

Among the detainees are members of Tera’s board of directors, former top diplomat Kerem Alkin, and his brother, well-known economist Emre Alkin. Kerem Alkin served as Turkey’s Permanent Representative to the OECD from 2021 to 2024. Emre Alkin is an economist and expert who has regularly appeared on national television channels.

Eugene Hvostik