Fatma Betul Sayan Kaya Arrested in Istanbul Over Turkey Fund Crisis

Fatma Betul Sayan Kaya Arrested : A former Turkish government minister has been detained as part of an inquiry into the country’s investment fund problem. Fatma Betul Sayan Kaya was arrested by an Istanbul court early Friday, accused of violating capital market laws and belonging to a criminal organization.

Kaya served as Turkey’s Minister of Family and Social Services from 2016 until 2018. She was also a prominent member of the ruling AK Party until departing in September after serving as its deputy chairman.

The lawsuit focuses on suspected financial behavior prior to a dramatic drop in share prices that rattled Turkey’s investment fund industry. An opposition legislator had previously accused Kaya and her husband of generating significant profits from share transactions just before the market meltdown.

Fatma Betul Sayan Kaya Faces Two Charges

According to the state-run Anadolu Agency and other Turkish media outlets, an Istanbul court ordered Kaya’s detention on two allegations. These include reportedly breaking the country’s capital markets law and joining a criminal organization.

According to Anadolu, the court action occurred after Kaya was questioned by the department in charge of investigating money laundering charges inside the Istanbul chief prosecutor’s office.

Prosecutors believe Kaya had access to non-public information that may have influenced the price or value of a financial market instrument. They also said she had communication with Emre Tezmen, a former official at one of the asset management firms involved to the crisis.

Ilyas Kaya, Kaya’s spouse, was also interviewed as part of the inquiry. However, he was released under judicial restrictions that prevent him from traveling overseas. The story did not indicate that he had been apprehended.

The claims against the pair originally surfaced in September. At the time, a spokesman for the main opposition Yeni Party accused them of earning around 2.17 billion lira, or $43.27 million, from investment transactions.

According to the spokeswoman, the investments were worth a total of 163 million lira, or around $3.25 million. The majority of the transactions apparently concerned shares in Ozata Denizcilik shipbuilder.

Fatma Betul Sayan Kaya Linked to Share Sale Allegations

In the months prior to pressure on the fund industry, Ozata Denizcilik’s share price increased significantly. At the beginning of April, its shares were trading at about 220 lira. The price increased to 4,980 lira by September 15.

The timing of the couple’s reported investment sales was the main focus of the opposition’s accusations. They were accused of making large gains just prior to the market chaos. These allegations are still part of the inquiry, though.

A liquidity crisis occurred on September 16 as a result of alleged share-price manipulation involving equities with little trading activity. The investment fund business was further disrupted as a result of the subsequent dramatic decline in share prices.

The inquiry is looking at whether connections with individuals connected to asset management companies and unreported information contributed to the purported financial activity. Kaya has been charged by the prosecution, and her spouse is still prohibited from traveling.

Following the market collapse and the opposition’s September claims, Kaya was arrested. The former minister is currently the focus of a criminal investigation investigating possible infractions of Turkey’s stock market regulations.