Turkish prosecutors have ordered the freezing of all assets belonging to a former minister and senior ruling party official, days after she resigned over allegations that she profited from the country’s deepening investment fund crisis.
The Istanbul Chief Public Prosecutor’s Office said in a statement late on Tuesday that it had instructed the relevant institutions to freeze all assets held by Fatma Betul Sayan Kaya and her husband, Ilyas Kaya. The move was reported by AFP and confirmed by Turkish outlets, including Turkish Minute and Balkan Insight.
Kaya served as Turkey’s Family and Social Policies Minister between 2016 and 2018 and, until the weekend, was a deputy chair of President Recep Tayyip Erdogan’s Justice and Development Party, known by its Turkish initials AKP. According to the prosecutor’s office, the case is being handled by the bureau that investigates terrorism financing and money laundering.
Kaya announced her resignation as AKP deputy chair on Saturday, 27 September, according to the party. In her statement she admitted no wrongdoing, saying she was stepping aside to take “political responsibility” so that any investigation could proceed “independently, impartially”.
The action against the couple follows weeks of pressure from Turkey’s main opposition, which alleged that the pair made large gains from trading during the crisis. The opposition claimed the couple invested about 63 million lira, roughly 1.3 million dollars, in April and cashed out shares in September for about 1.3 billion lira, or some 26.5 million dollars.
Accounts of the trade differ in detail. Turkish Minute reported the opposition’s specific claim that Kaya bought shares in a shipbuilding company in April and sold them months later at a far higher value, while her husband was alleged to have made hundreds of millions of lira through similar transactions. The allegations have not been proven in court, and neither Kaya nor her husband has been charged in connection with the trades.
The opposition has said the timing of the transactions points to the use of inside information and has pledged to name further individuals linked to the crisis this week. Those claims remain untested.
The freeze order is the most direct step yet involving a former senior government figure in an investigation that has been widening for weeks. According to Balkan Insight, the broader probe into questionable capital market transactions has so far resulted in 51 people being remanded in custody.
The scandal erupted in mid-September when several funds said they could not meet investor redemption demands, triggering a sharp sell-off on the Istanbul stock exchange. Regulators moved quickly, placing seven companies into liquidation.
Those seven firms held 131 investment funds with assets reported at around 17 billion dollars, according to figures cited from the Capital Markets Board, the regulator known as the SPK. The board said more than 455,000 individual investors were affected, an indication of how far the fallout has spread among ordinary savers.
Officials have described the collapsed arrangement as a “Ponzi-like” scheme, a structure in which returns to earlier investors are paid from money put in by later ones rather than from genuine profit. Such schemes typically unravel when redemption demands outpace fresh inflows, which is what the funds signalled when they said they could not meet withdrawals.
Erdogan has publicly defended his party’s record as the crisis has grown. Addressing party members, he said the AKP was “clean” and rejected criticism from political opponents, telling them to look at their own records first. On Tuesday, according to AFP, he held a three-hour meeting with economic aides on the fund crisis.
The matter is expected to feature prominently as the Turkish parliament returns from its summer recess. The reopening gives the opposition a platform to press its case and to release any further names it says it holds, though the government has so far framed the affair as a legal process rather than a political one.
For Turkey, the episode lands at a sensitive moment for market confidence. A liquidation affecting more than 455,000 investors and roughly 17 billion dollars in fund assets tests both the credibility of the regulator and public trust in the country’s capital markets, particularly among the retail savers who bear the losses when such structures fail.
What remains unresolved is whether the allegations against Kaya and others will translate into formal charges, how much of the frozen wealth can be recovered for affected investors, and how far the investigation will reach into the ruling party and Turkey’s financial sector. The prosecutor’s office has not said when it expects to conclude the inquiry.