Turkey minister says 'crime network' behind fund scandal

Investigators probing a multi-billion-dollar investment fund scandal have uncovered a "comprehensive criminal network" that infiltrated the highest levels of Turkey's financial markets, Justice Minister Akin Gurlek said Tuesday.

His remarks came days after police detained the Istanbul stock exchange boss as part of a sprawling probe that began in mid-September into allegations of widespread market manipulation affecting the savings of nearly half a million investors.

The scandal has dominated the headlines for weeks, raising uncomfortable questions about who might have profited and putting pressure on President Recep Tayyip Erdogan's ruling AKP, with one of its top cadres resigning following allegations about her investment activities.

"The structure is not limited to a simple stock market scam, there is a comprehensive criminal organisation involved," Gurlek told the private channel NTV.

"Although the investigation initially began with market actors, it has now revealed a criminal organisation that extends into the upper levels of the financial bureaucracy," he said.

"Those within the mechanism that controls the money rendered the oversight mechanisms ineffective by establishing a system of bribery," he added.

By forming "a cartel", they sought "to siphon off liquidity from the market by manipulating certain shares and to take control of the market", Gurlek added.

Investigators were looking into 433 suspects and probing "all links within the structure, which extends to the very foundations of the financial system and the upper echelons of the capital markets".

So far, 112 suspects had been jailed pending trial, while another 186 had been granted conditional release, and 38 others were still being sought, Gurlek said. Among them were "political figures linked to criminal organisations within our fund market", he said, without giving further details.

On Saturday, Korkmaz Enes Ergun, head of the Borsa Istanbul stock exchange, was detained on suspicion of "membership in an organisation established to commit crimes" and accepting bribes, Anadolu state news agency reported.

Two weeks ago, the head of Turkey's SPK capital markets regulator was sacked by presidential decree just days after prosecutors began investigating his predecessor in connection with the affair.

At the same time, the deputy finance minister also resigned after his son-in-law was jailed pending trial in the fund scandal.

The government has called for the voluntary return of all monies obtained through market manipulation, with Gurlek telling NTV "approximately 30 billion lira ($600 million) in cash, real estates and shares" had so far been collected, while vowing to pursue any monies transferred abroad.

Gurlek said members of the network engaged in "close and systematic collaboration" and also claimed there was "extensive collusion between those carrying out the stock market manipulation and the media".

Although he did not elaborate further, police have so far detained five journalists, charging them with spreading misinformation about the scandal, several of whom have been jailed pending trial.

Gurlek stressed a key priority was to ensure the return of investors' money, with Erdogan's office on Tuesday saying that by October 30, payments totalling 97.3 billion lira had been made to nearly 250,000 investors in a post on X.