Türkiye Launches Crackdown on “Fund Chain” Stock Manipulation: Two Holdings Seized in Major Market Probe

Turkey has launched one of its most aggressive market-manipulation investigations in recent years, seizing assets of two holding companies and placing them under state trusteeship. The probe targets what officials describe as a “new generation” of stock manipulation via investment funds. The scheme had been flagged by business columnists weeks earlier, prompting criticism over why authorities waited until small investors incurred losses.

Prosecutors Move After Weeks of Warnings

The Istanbul Chief Public Prosecutor’s Office has seized the assets of Hat Holding and Investco Holding, appointing the Savings Deposit Insurance Fund (TMSF) as trustee. The companies are accused of violating the Capital Markets Law, forming a criminal organization, and laundering money through stock-market operations.

The move follows public warnings about unusual fund-driven market manipulation—first discussed in financial media and later acknowledged by officials. (Columnist İbrahim Kahveci was among those who drew attention to the irregularities, but the story quickly expanded beyond the press into a major state investigation.)

A “New Generation” Manipulation Framework: The Fund Chain

According to investigative reporting and regulatory sources:

• Small, low-value companies were purchased quietly

• Their shares were artificially inflated through coordinated buying

• The inflated companies were merged into a new holding structure

• That holding was listed at a dramatically higher valuation

• Public offerings were used to extract cash

A typical scenario involved:

➡️ Four companies worth TRY 20 million each
➡️ Combined into a holding valued at TRY 40 billion
➡️ Public offering raising up to TRY 13 billion in cash

Regulators say this structure resembles past financial pyramid schemes such as Seçil Erzan or TİTAN, but executed through institutional investment funds.

Government Signals a Hard Line on Market Abuse

Finance Minister Mehmet Şimşek and Capital Markets Board (SPK) Chairman İbrahim Ömer Gönül recently issued stern warnings:

“The stock exchange is not a playground.” — Mehmet Şimşek

Şimşek told the Türkiye Capital Markets Congress that penalties will be significantly increased and regulatory loopholes closed, particularly those involving investment funds.

SPK’s Gönül echoed the message:

“If necessary, we will revoke licenses.”

Even after the minister’s assurance that authorities were aware of manipulations, small investors criticized regulators for acting late.

Prosecutors Seize Assets, TMSF Takes Control

Following these statements, prosecutors began officially intervening in markets.

Key steps taken:

• Asset freeze on Hat Holding and Investco Holding

• TMSF appointed as trustee to manage both companies

• Accusations include falsifying financial statements and misleading public disclosures (KAP filings)

Investco Holding had already been questioned in September 2025 under similar allegations, when 14 executives were detained. Shares collapsed afterward, inflicting heavy losses on retail investors.

Authorities say the latest seizure aims to:

“Protect financial records and prevent further damage to retail investors.”

The investigation is ongoing and further detentions are possible.

Mehmet Şimşek Reveals Why Turkey’s Disinflation Process Is Slowing Down

Why Now? Analysts Point to Pressure From Markets

The crackdown comes as Türkiye tries to boost investor confidence amid:

• Record-high retail participation (over 6.5 million stock investors)

• Rapid expansion of the investment-fund sector

• Persistent concerns from foreign funds about market integrity

Economists argue that market manipulation undermines foreign capital inflows—something the government desperately needs as macroeconomic challenges intensify.

Outlook

With the first wave of asset seizures completed, more investigations are expected. The Ministry of Finance and SPK say that manipulative fund structures will be dismantled, and sanctions upgraded from administrative fines to criminal liability.

Whether the crackdown is sustained — or remains a symbolic intervention — could shape Türkiye’s ability to attract long-term investment.

KARAR Daily, ParaAnaliz.com

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