Turkish justice minister says ‘crime network’ behind fund scandal

Investigators probing a multibillion-dollar investment fund scandal have uncovered a “comprehensive criminal network” that infiltrated the highest levels of Turkey’s financial markets, Justice Minister Akın Gürlek said Tuesday.

His remarks came days after a court ruled for the arrest of the former İstanbul stock exchange boss as part of a far-reaching 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 Erdoğan’s ruling Justice and Development Party (AKP), with one of its top members resigning following allegations about her investment activities.

“The structure is not limited to a simple stock market scam, there is a comprehensive criminal organization involved,” Gürlek told NTV.

“Although the investigation initially began with market actors, it has now revealed a criminal organization 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.”

By forming a “cartel,” they sought “to siphon off liquidity from the market by manipulating certain shares and to take control of the market,” Gürlek 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 have been jailed pending trial, while another 186 have been granted conditional release, and 38 others were still being sought, Gürlek said. Among them were “political figures linked to criminal organizations within our fund market,” he said, without giving further details.

On Saturday Korkmaz Enes Ergun, head of the Borsa İstanbul stock exchange, was detained on suspicion of “membership in an organization established to commit crimes” and accepting bribes. He was arrested on Tuesday on bribery charges.

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.

© Agence France-Presse