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Şimşek: 66 of 131 funds liquidated, small investors to get priority
Treasury and Finance Minister Mehmet Şimşek said liquidation has been completed in 66 of the 131 funds and that, once the law passes, small investors with up to 1 million liras and money market fund holders will be prioritized.
Turkish Treasury and Finance Minister Mehmet Şimşek gave an update on the 131 investment funds placed into liquidation by the Capital Markets Board (SPK). Speaking on a joint broadcast by Bloomberg HT and Habertürk, Şimşek stressed that the cost of the process would not be passed on to the public.
"A total of 131 funds under seven portfolio management companies were placed into liquidation. Sixty-six of the 131 funds have been fully liquidated. A total of 40.8 billion liras has been paid to 45,747 accounts. The ordinary liquidation was carried out successfully," Şimşek said.
Equity fund investors recovered 58% of value
According to Şimşek, money market fund investors in the ordinary liquidation received an additional return of about 1.43% on top of their Sept. 17 values, while investors in equity funds were able to recover about 58% of their Sept. 17 values.
Şimşek said Hedef Portföy will also be placed into ordinary liquidation. The company has 31 funds, four of which are money market funds. "We expect the liquidation of four of the seven portfolio management companies to be completed by the end of the week," he said. That would leave Tera, Pusula and Atlas portfolio management companies under extraordinary liquidation.
Priority for investors with up to 1 million liras
Şimşek said small investors would be prioritized once the law on extraordinary liquidation passes parliament. "If the law is adopted, immediately afterward a process will be followed in the companies under extraordinary liquidation that prioritizes small investors with up to 1 million liras and money market fund investors," he said.
Şimşek said this step would largely complete the process for about 390,000 accounts. "There will be an interim payment. The final payment will take time; that is how the process works around the world too," he said, adding that final payments would be made in line with investors' shares in the funds and that the law was a matter for the Turkish parliament to decide.
"It has been stated very clearly that public resources will not be used, and it will continue that way," Şimşek said. The liquidation is being carried out by İş Bankası and Ziraat Bankası.
Refunds to be sought from those with gains of 10 million liras or more
Şimşek said authorities would approach those who made real gains of 10 million liras or more from the funds. Noting that they include several hundred companies as well as individuals, he said: "They will be invited. If they return the money voluntarily, there is no problem; if they do not, legal proceedings will be initiated."
He said the aim was to recover assets transferred from the funds to individuals and companies that profited unlawfully, and that the personal assets of people found to have acted in concert could also be pursued. The minister said the Savings Deposit Insurance Fund (TMSF), the Justice Ministry and the Central Registry Agency (MKK) were working together, and that those who profited from market-disrupting activities had been identified.
"At the end of the process, with the resources recovered into compensation accounts, people may possibly get back the money they invested," Şimşek said.
How it started
The SPK suspended trading in 131 funds belonging to seven portfolio management companies and decided to liquidate them after detecting unusual price movements on Sept. 17 in shares linked to some of the funds. The first payments for the funds of A1 Capital, Bulls and Pardus were made on Oct. 8.
A bill on the liquidation of the funds was approved by parliament's Planning and Budget Committee on Oct. 14 and is expected to be debated in the General Assembly this week.
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