President Recep Tayyip Erdoğan said Thursday that the recent problems involving investment funds posed no risk to Türkiye's financial system or the wider economy, adding that those responsible will be held accountable.
That marked Erdoğan's first comments since authorities took steps last week to support financial stability after some investment funds defaulted on redemption requests.
Prosecutors are currently investigating the activity of 131 investment funds held by seven companies holding more than $18 billion in assets.
All of them were placed into liquidation last week by the Capital Markets Board (SPK), which said they handled the money of nearly half a million investors.
Investigations are focused on suspected share price manipulation in thinly traded stocks, with dozens of people, including fund managers and senior executives, arrested or detained.
Judicial proceedings are ongoing, Erdoğan told reporters on the sidelines of the U.N. General Assembly in New York.
He said the problems had emerged in a limited area of the capital markets and involved a certain number of funds.
Erdoğan said the issue did not pose a risk to either the financial system or the Turkish economy, arguing that portraying it as a problem affecting the entire market would be "unfair."
The necessary steps are being taken in line with capital market principles and the law, while relevant institutions are pursuing the matter, the president noted.
"Whoever is responsible will be held accountable before the law. There should be not the slightest hesitation on this matter," Erdoğan said.
Justice Minister Akın Gürlek said Wednesday the government's top priority was to recover the money of investors.
Treasury and Finance Minister Mehmet Şimşek will hold a series of meetings Thursday and Friday to discuss the process of the funds liquidation, Anadolu Agency (AA) said.
The meetings will focus on technical work on the liquidation of the funds and payments to investors, with officials from relevant institutions and organizations also participating, the report said.
It said the main priority of the meetings would be to preserve the rights and interests of investors, to ensure the healthy functioning of markets and to discuss steps that may be taken to support financial stability.
Coordination among various institutions and a technical road map will also be on the agenda, it added.
Erdoğan said legal and administrative measures would be introduced if necessary to prevent similar problems from occurring again.
"We will ensure that whatever measures are needed, including legal and administrative regulations, are implemented to prevent a similar problem from occurring," he said.
He also stressed the importance of conducting the process transparently and carefully given the structure of capital markets, adding that instructions had been issued accordingly.
The problems began to emerge after the SPK on Aug. 28 issued new guidelines on investment funds, saying they could no longer invest all their assets in one stock but were required to diversify.
The move sought to address concerns that many funds were heavily investing in a small number of obscure or hard-to-sell stocks.
In order to comply, funds began selling stocks, spooking investors who got the jitters and started trying to cash in their investments.
But scandal erupted last week when several companies admitted they were unable to liquidate their assets fast enough, raising liquidity concerns.
"We've seen the savings of some citizens.. have been exploited and transferred elsewhere and smuggled abroad. Our goal is now to bring them back and ensure that our citizens get their money," Gürlek said in a YouTube interview in New York.
Prosecutors have "initiated proceedings against 63 individuals" over allegations of organized crime, fraud, defrauding the state and violations of the capital markets law, he said.
In certain cases, the value of the stocks had been wildly exaggerated, Gürlek said, pointing to one without a listed company headquarters whose "value is currently higher than Turkish Airlines and Aselsan", Türkiye's largest defense electronics firm.
