Tera Portfoy Says Repayments Underway as Turkey Extends Fund Liquidation
Tera Portfoy says it has repaid some investors but faces delays, as Turkey's markets regulator extends the liquidation of 131 funds to six months.
Turkish portfolio management firm Tera Portfoy said it has repaid a portion of its investors and is working to settle the rest, but that restrictions imposed by authorities are holding up further payments.
The company said redemption requests had surged within a short window as inflows into its funds were being converted into investments, turning into a collective withdrawal demand of roughly 300 billion Turkish Lira ($6.15 billion). It said meeting a demand of that scale so quickly would be difficult for any financial institution, and that investors were paid between September 16 and 18 before transaction restrictions and blocks halted further repayments. Tera added that it is prepared to cooperate with authorities to close the process quickly.
Authorities stepped in this week to stabilise markets after a liquidity crunch at investment funds set off a sharp selloff in Turkey's benchmark stock index. The measures helped the index recover part of its losses.
As part of the intervention, the Capital Markets Board directed Isbank and Ziraat Bank to oversee the liquidation of 131 investment funds managed by seven portfolio management companies, including Tera Portfoy, Pusula Portfoy and Hedef Portfoy, on the TEFAS electronic fund trading platform.
Late on Sunday, the regulator said it was extending the liquidation window given to the two banks to six months from three, citing the portfolio structures of the funds involved and market developments. It did not give further details.
The crisis has shaken a major emerging-market fund industry, led to the detention of executives at several firms and focused attention on concentrated bets in thinly traded stocks. Finance Minister Mehmet Simsek said on Friday that the problems are contained and do not pose a systemic risk.
On Saturday, the Justice Ministry said Pusula Holding Chairman Serdar Turhan, Tera Yatirim Holding Chairman Emre Tezmen and three fund administrators had been detained as part of the investigation, in addition to four suspects arrested earlier.
On Sunday, the ministry said it had identified a $15 million transfer from Turhan's account to an account in Switzerland, and a $25 million transfer from an account belonging to Muhammed Yariz, an executive at Pusula Portfoy Yonetim, which is linked to Pusula Holding. It added that Nihat Kirmizi, chairman of Doga Sigorta, had also been detained in the probe.