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Turkey liquidates funds in Ponzi-like probe, trapping 455,758 investors
Turkish regulators announced the liquidation of about $20 billion across stock and money market funds as withdrawals surged by 600 billion liras from Aug. 31 to Sept. 23.
Turkey has launched large-scale liquidation of stock and money-market funds tied to long-running Ponzi-like schemes, trapping 455,758 investors, according to the Capital Markets Board cited by LiveMint Markets.
The move follows investor losses and panicked attempts to exit funds shortly after regulators cracked down on alleged schemes involving illiquid shares. Regulators said they will liquidate about $20 billion in funds, though it remains unclear how much investors will be able to recover.
A case described by LiveMint Markets highlights the fallout, with an unemployed 28-year-old investor, Mehmed Kervanci, who put 2.5 million liras into a Turkish stock fund based on a relative’s advice and tried to sell after two weeks.
LiveMint Markets also reported that share price declines have forced fund managers to sell more assets to raise cash, worsening losses and accelerating withdrawals. The outlet said investors pulled about 600 billion liras from Turkey’s investment funds between Aug. 31 and Sept. 23, and that Tera’s chairman, Emre Tezmen, was arrested early Wednesday.