Turkey detains finance executives as authorities order $18 billion fund liquidation

Turkish authorities detained several senior finance executives and imposed travel bans on others as they investigate mass outflows from investment funds.

Muhammed Yariz, chairman of Pusula Portfoy Yonetimi, was arrested, according to the Istanbul prosecutor’s office. Altunc Kumova, chairman of Destek Holding, was also detained, as were Ibrahim Bekci, deputy chief executive of Tera Portfoy Yonetimi, and Hedef Holding chairman Namik Kemal Gokalp.

Travel bans were imposed on Tera Holding Chairman Emre Tezmen, Pusula Holding’s Serdar Turhan, Bulls Yatirim Menkul Degerler Chairman Kemal Akkaya and Lydia Holding Chairman Enver Cevik.

The actions came after authorities ordered the liquidation of 130 funds managed by seven portfolio companies, including funds run by Tera and Pusula.

The funds held the equivalent of about $18 billion as of Wednesday evening, according to a person familiar with the matter. More than 350,000 investors were exposed to the funds, the person said, asking not to be identified because the figures have not been made public.

The investigation follows a period of heavy withdrawals that has drawn scrutiny to several Turkish financial groups. Destek’s Kumova became one of the country’s wealthiest people on paper after shares in some of his companies surged by several thousand percent over the past year.

Turkish authorities have not publicly detailed the allegations against each executive. The prosecutor’s statement confirmed Yariz’s arrest and the detentions of the other executives as the fund investigation continues.