Ex-Turkish minister faces asset freeze over alleged $26m windfall

Turkish prosecutors have moved to freeze the assets of former minister and ruling Justice and Development Party (AKP) deputy chair Fatma Betül Sayan Kaya and her husband, İlyas Kaya, amid an investigation into a major investment fund crisis.

The Istanbul Chief Public Prosecutor’s Office said on Tuesday that it had sent a request to relevant institutions seeking the freezing of all assets belonging to the couple as part of the ongoing investigation into capital market transactions.

The development came days after Kaya resigned from her position in the AKP amid allegations that she and her husband made substantial profits from share trading shortly before the investment fund crisis erupted.

Kaya, who served as Turkey’s family and social affairs minister from 2016 to 2018, announced her resignation on September 26, saying she wanted investigations into the allegations to proceed independently and without her political position becoming an issue. She did not admit wrongdoing.

The allegations were made by opposition Yeni Party spokesman Zeynel Emre, who claimed that Kaya invested about 63 million Turkish lira in shares of shipbuilding company Özata Denizcilik in April and later withdrew about 1.34 billion lira in September.

Emre also alleged that İlyas Kaya invested nearly 100 million lira and later withdrew about 826 million lira from the investment.

The allegations have not been established in court.

The wider financial crisis erupted in September after several investment funds struggled to meet investors’ redemption requests, triggering a sharp fall in Turkey’s stock market and a regulatory investigation.

Authorities subsequently ordered the liquidation of 131 investment funds managed by seven portfolio companies, with the affected funds holding assets worth more than $18 billion and involving more than 450,000 investors.

Turkish regulators have also investigated suspected market manipulation and other irregularities linked to the funds and shares involved in the crisis.

Kaya’s resignation came as the investigation widened, with authorities freezing assets belonging to companies, funds and individuals linked to the probe. Some of the restrictions on companies and funds were later lifted following further regulatory assessments, while measures against individuals remained in place.

President Recep Tayyip Erdogan has defended his ruling party and said those responsible for wrongdoing should be held accountable.

The investigation into the investment fund crisis is continuing.