Turkey Ruling Party Deputy Chair Resigns Amid Share-Trading Allegations

Fatma Betul Sayan Kaya, a senior official in Turkish President Recep Tayyip Erdogan’s ruling Justice and Development Party (AKP), has stepped down amid allegations over share transactions made shortly before a major sell-off in Turkey’s stock market.

Kaya, who served as an AKP deputy chair responsible for social policies and previously served as Turkey’s family and social affairs minister, asked Erdogan to relieve her of her party duties while the allegations are examined. Erdogan subsequently accepted her resignation.

The allegations were raised by Zeynel Emre, spokesman for the opposition Yeni Party. He claimed that Kaya and her husband, Ilyas Kaya, invested about 163 million Turkish lira ($3.3 million) in shares in April, with much of the money reportedly placed in shipbuilder Ozata Denizcilik.

Emre alleged that the couple later received about 2.17 billion lira ($44 million) from selling the shares, with the transactions taking place before a major market disruption on September 16.

The claims have not been established as wrongdoing by Kaya. She has not directly addressed the specific allegations but said she believed taking political responsibility was necessary while the matter was clarified. She also said she wanted the process to proceed without any doubt or interference.

The controversy comes amid a wider crisis in Turkey’s investment-fund industry. Turkish stocks suffered a sharp sell-off on September 16 following concerns surrounding investment funds heavily exposed to thinly traded shares. The country’s main BIST-100 index fell by more than 8% during the week, according to Reuters.

Turkish authorities have launched investigations into suspected market manipulation. The Istanbul Chief Public Prosecutor’s Office has initiated legal proceedings involving 76 people as part of an investigation into seven investment funds, while the Capital Markets Board has also taken action against individuals and companies connected to transactions in some shares.

The Capital Markets Board has filed criminal complaints against 11 people over transactions involving Ozata Denizcilik shares, according to Turkish Minute. Several individuals have also been barred from trading as authorities investigate possible market manipulation.

Ozata Denizcilik’s shares had risen sharply in the months before the September market turmoil. Reuters reported that the stock traded at about 220 lira at the beginning of April and reached about 4,980 lira on September 15, before the market disruption the following day.

AKP spokesman Omer Celik said the party had accepted Kaya’s resignation and declared that anyone found to have been involved in irregularities, corruption or abuse would be held accountable.

Kaya’s resignation comes as Turkish authorities continue investigating the causes of the fund crisis and the suspected manipulation of thinly traded stocks. The allegations concerning Kaya and her husband remain subject to investigation, and no finding of wrongdoing against Kaya has been established in the reports reviewed.