A Turkish court has ordered the jailing of a former Family and Social Affairs Minister and senior member of the ruling AK Party as part of an investigation into the nation's fund crisis. The former minister, Fatma Betul Sayan Kaya, was arrested on charges related to capital markets law and organizational membership.
Kaya, who served as minister from 2016 to 2018, resigned from her role as deputy chairperson of the AK Party in September. Her arrest follows her questioning by a bureau investigating money laundering crimes. The Istanbul court's decision was reported by the state-run Anadolu Agency and other domestic media outlets.
The investigation stems from accusations by an opposition politician that Kaya profited significantly from share transactions shortly before a stock market selloff triggered by the crisis. Prosecutors allege that Kaya possessed non-public information that could have influenced the price of capital market instruments. She is also reported to have had contact with a former executive of an asset management firm involved in the financial turmoil.
In September, a spokesperson for the opposition Yeni Party claimed that Kaya and her husband had received approximately 2.17 billion lira ($43.27 million) from investment sales totaling 163 million lira ($3.25 million). The majority of these sales were reportedly in shares of the shipbuilder Ozata Denizcilik.
The crisis in the investment fund industry, which led to a liquidity crunch and a significant drop in stock prices on September 16, was reportedly triggered by suspected share-price manipulation in thinly traded stocks. Kaya's husband, Ilyas Kaya, was released under judicial measures that prohibit him from traveling abroad in connection with the same investigation.
