'Comprehensive criminal network' behind billion-dollar fund scandal, says Turkey's justice minister

Investigators probing a multi-billion-dollar investment fund scandal in Turkey have uncovered a 'comprehensive criminal network' that infiltrated the highest levels of the financial markets, Justice Minister Akin Gurlek said on Tuesday.

His remarks came days after police detained the head of the Istanbul stock exchange as part of a sprawling investigation that began in mid-September into allegations of widespread market manipulation affecting the savings of nearly half a million investors.

The scandal has dominated headlines in Turkey for weeks, raising questions about who might have profited and putting pressure on President Recep Tayyip Erdogan's ruling AK Party. One of the party's top cadres has resigned following allegations about her investment activities.

'The structure is not limited to a simple stock market scam; there is a comprehensive criminal organisation involved,' Gurlek told the private channel NTV.

'Although the investigation initially began with market actors, it has now revealed a criminal organisation that extends into the upper levels of the financial bureaucracy,' he said. Those inside the mechanism that controls the money had rendered the oversight mechanisms ineffective by establishing a system of bribery, he added.

By forming a 'cartel', they sought to siphon off liquidity from the market by manipulating certain shares and to take control of the market, Gurlek said.

Investigators are looking into 433 suspects and probing all links within the structure, which extends to the very foundations of the financial system and the upper echelons of the capital markets, the minister said.

So far, 112 suspects have been jailed pending trial, another 186 have been granted conditional release, and 38 others are still being sought, Gurlek said.

Among the suspects were 'political figures linked to criminal organisations within our fund market', he said, without giving further details.

On Saturday, Korkmaz Enes Ergun, head of the Borsa Istanbul stock exchange, was detained on suspicion of membership in an organisation established to commit crimes and of accepting bribes, the state-run Anadolu news agency reported. Two weeks ago, the head of the SPK capital markets regulator was removed by presidential decree, days after prosecutors began investigating his predecessor in connection with the affair. At the same time, the deputy finance minister also resigned after his son-in-law was jailed pending trial in the fund scandal.