What happened to the stock
Turkiye Sigorta dropped 18% across two sessions, hitting its weakest level in almost two years. Losses deepened after local media reported that two senior executives had been taken into custody amid a broad probe into alleged manipulation in Turkish funds.
The Istanbul-based insurer declined to answer requests for comment made by phone and email. The board said on Monday it dismissed deputy CEO Hasan Burak Ozer, after announcing on Oct. 15 that CEO Atilla Cakmak had resigned; the company also postponed third-quarter results that were due on Oct. 19.
The probe and the players
NTV, citing unnamed sources, reported allegations that Turkiye Sigorta directed cash toward funds run by Tera Portfoy Yonetimi, the brokerage at the center of the crisis. Cakmak's attorney, Ersin Yucel, said his client rejects all allegations of wrongdoing and intends to contest the arrest.
Cakmak and Ozer are the latest additions to a growing list of finance figures detained as authorities try to contain the crisis. Justice Minister Akin Gurlek said this month that the number of arrests has reached 88 to date. Prosecutors are examining a scheme in which local investment funds bought shares of often-obscure companies and then boosted their values many times over. Cakmak and Ozer are among a growing roster of prominent finance figures arrested as authorities move to contain the fallout across stock and bond markets.
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Company backdrop
Cakmak, previously a bank regulator and a former deputy governor at the Turkish central bank, was at the helm of a market favorite. From his 2023 appointment through a May peak, Turkiye Sigorta surged more than 500%, outpacing almost all names in the Borsa Istanbul 100 Index. Since September, the shares have fallen and erased more than 40% of the company's market value.
Formed in 2020 by merging insurance units of state-owned banks, Turkiye Sigorta has expanded quickly and, according to an Oct. 21 presentation, holds the largest share of Turkey's insurance market. It is 76% owned by the sovereign wealth fund, whose chairman is President Recep Tayyip Erdogan.
Why it matters for investors
Regulatory filings indicate that Tera Yatirim Menkul Degerler AS managed funds that held stakes in Turkiye Sigorta, with at least some purchases in August just before the scandal surfaced. That overlap means headlines about the probe can move both sides of the trade - the company and some of its investors - and the stock has already shown how fast it can swing on new developments.
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