A wave of investor withdrawals from Turkish asset managers this week triggered a widening probe, with authorities saying multiple senior finance figures were either detained or barred from leaving the country. Police arrested Pusula Portfoy's Chairman Muhammed Yariz. Authorities said the detainees included Hedef Holding's Chairman Namik Kemal Gokalp, Altunc Kumova, the majority owner of Destek Holding, and Tera Portfoy's Deputy Chief Executive Officer Ibrahim Bekci. Tera Holding's Chairman Emre Tezmen was given a travel ban.
Earlier Thursday, in an effort to stabilize trading, regulators outlined a package that included submitting criminal complaints targeting dozens of individuals and imposing trading bans over alleged share-price manipulation. Officials also said they would roll out additional safeguards to keep the stress from spilling over.
The Capital Markets Board said that Tera, Pusula and five other managers together oversee in excess of 100 funds slated for liquidation, with Tera and Pusula representing over 70% of the total. The measures also call for winding down nearly $20 billion in portfolios managed by Tera Portfoy and other firms. Trading bans were imposed on managers at Tera and Pusula, with the watchdog citing alleged manipulation involving Katilimevim, Gundogdu Gida and Destek Finans Faktoring AS.
After Treasury and Finance Minister Mehmet Simsek convened an emergency meeting on Thursday morning, the Financial Stability Committee described the situation as "temporary and manageable." The flare-up traces back to August, when tighter rules on stock funds with concentrated positions in companies with small free floats forced selling and sparked a rush for the exits. In recent days, funds run by Tera and Pusula said they could no longer satisfy client redemptions.
Turkey's central bank introduced measures to support liquidity and signaled it stands ready to add more. It said it will boost funding through one week repo auctions when necessary and will adjust banks' borrowing limits.
In a separate step, the country's banking watchdog, in an afternoon update, said banks could, through the end of the year, leave buyback shares out of core capital requirement calculations.
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The initial reaction was upbeat. The Borsa Istanbul 100 steadied after a three-day slump that had chopped nearly 10% off the benchmark, the banks sub-index surged as much as 9.4%, and the BIST 100 closed up 3% on the day. Under the surface, though, the selloff persisted in the long tail of smaller names: more than 100 stocks outside the main indexes skidded toward the 10% daily loss threshold. Of the 550-plus listed companies, 367 finished lower, with about 170 down at least 5%.
The turmoil spotlighted the risks brewing inside Turkey's fast-growing fund scene, where some managers built chunky stakes in thinly traded shares. Tera, founded by Emre Tezmen, oversees about 730 billion liras (roughly $15 billion). Its flagship fund notched a gain of more than 66,000% over three years by funneling billions of liras into a tight ring of related firms and layering on borrowed money. Tezmen defended the firm on X, writing that there is only "a temporary liquidity issue in certain funds," and alleging, "We have been subjected to a highly planned, intentional, and organized speculative attack by the notorious malevolent forces."
As Emre Akcakmak, who leads East Capital's frontier markets group in Dubai, framed it: "The glass-half-empty version of the story is that Borsa Istanbul investors did not have to go through this in the first place." On the other hand, he said, "the policymakers not only sought to improve the regulatory framework, but also took concrete steps to ease the system-wide stress following an emergency meeting earlier today."
For everyday investors, the takeaway is straightforward: policymakers moved quickly to contain the fallout and add liquidity, while the risks tied to concentrated bets in thinly traded stocks are being exposed in real time. What happens next hinges on the liquidations, the bans, and whether confidence returns beyond the blue chips.
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