Former Istanbul Stock Exchange Chief Arrested in Probe Involving 131 Investment Funds
Key Facts
Keremaz Ines Ergun, the former chief executive of the Istanbul Stock Exchange, was formally arrested on November 3 on charges of receiving a bribe, in a development that brings a senior figure in Turkey’s market infrastructure into the investment-fund crisis probe. Authorities had detained him on October 31, before formally announcing his arrest days later. The case comes amid steps to liquidate funds run by portfolio management companies, after Turkey’s Capital Markets Board decided to liquidate 131 funds belonging to 7 companies. According to the board, the funds had 455,758 individual investors. The breadth of the investor base puts the case at the heart of confidence in the asset management sector, as investigations and legal proceedings continue.
Turkey’s Capital Markets Board said the liquidation decision was issued on September 17, 2026, and covered 131 funds run by seven portfolio management companies. The scope of the decision means the process is not limited to a single fund, but extends to a group of investment products managed by several companies. Records from the Central Securities Depository, on which the board relied, showed 455,758 individual investors in the funds concerned. That number points to the broad range of stakeholders affected by the liquidation process, without meaning that all face the same financial outcome. The figure’s significance lies in the size of the investor base whose investments must be handled during the liquidation process.
The assets of the funds caught up in the crisis exceeded $20 billion over three years, according to Reuters, as investors turned to seek returns that would offset the lira’s decline and rising inflation. This places the funds’ growth in the context of investors seeking tools to protect the value of their savings in a pressured economic environment. Assets in Turkey’s portfolio management sector also rose to $329 billion in August 2026, from $246 billion a year earlier, according to Capital Markets Board data cited by Reuters. The year-on-year comparison highlights the expansion of the broader sector alongside the worsening crisis involving the funds under investigation. The sector’s total assets do not mean that all of this money is subject to liquidation; the decision concerns 131 specified funds.
The crisis also spilled over into Turkey’s stock market, with Istanbul’s benchmark index recording its worst monthly performance since 2008 in September, according to Reuters. The agency said the crisis pushed stocks into a bear market, linking the fund turmoil to the market’s deteriorating performance. This comes as assets in the portfolio management sector doubled from $246 billion a year earlier to $329 billion in August 2026. Together, these developments show rapid growth in the sector alongside pressure on stocks as the fund crisis came to light. Finance Minister Mehmet Simsek had warned in November 2025 of manipulation through some funds, saying: "We know that these manipulations are carried out particularly through certain funds." He added that regulatory gaps would be addressed, Reuters reported.
Attention is now turning to the liquidation process and its implications for investors, with the Capital Markets Board saying the process will take six months. The board said investors in some funds whose net investments are below 1 million Turkish lira will receive the full amount. This commitment applies to some funds and, according to the statement, does not cover all investors or all funds subject to liquidation. In the context of economic risks, JPMorgan analysts warned that disruption in the fund sector adds "material downside risks" to their forecast for Turkish gross domestic product growth of 3% in 2026. The estimate links the sector’s crisis to the growth outlook set by the analysts, as liquidation measures and investigations continue.