Turkey jails former minister in widening fund fraud probe

Fatma Betul Sayan Kaya, a former family and social affairs minister in Turkey, was taken into custody late Thursday. She had resigned from her position as deputy chair of the ruling Justice and Development Party in September. Her removal from that role came shortly after reports surfaced regarding her sale of shares worth tens of millions of dollars. The stock sales occurred just before regulators moved to liquidate several investment funds due to suspected manipulation.

State media reports indicate that authorities have charged Kaya with membership in a criminal organization and violations of the Capital Markets Law. She remains in custody pending a possible trial. Her husband was released following a second round of questioning. He must now report to police regularly as a condition of his freedom.

Turkey’s main opposition party alleges that Kaya received 2.17 billion liras, approximately 43 million dollars, from her investments. The party claims she initially invested 163 million liras, or 3 million dollars, in one of the implicated funds. The couple has denied any wrongdoing. However, media reports state they transferred a portion of the profits to an account designated by banking regulators.

The case is part of a larger investigation into market manipulation and insider trading. Justice Minister Akin Gurlek stated this week that more than 430 people are under investigation. Of that group, 112 have been arrested. The probe continues to expand across the financial sector.

Kaya served as a minister from 2016 to 2018. Her arrest marks the highest-ranking official taken into custody in this specific round of enforcement actions. The liquidation of the funds followed a regulatory review that cited alleged irregularities in share pricing.