Turkey's capital watchdog probes wide range of files

ANKARA - Anadolu Agency

The Capital Markets Board has opened a detailed probe into financial transactions between May 20 and June 19. DHA photo

The Capital Markets Board’s (SPK) move to open a detailed investigation into financial orders at brokerages with a particular focus on transactions between May 20 and June 19 is a “routine operation” regarding a period when extraordinary pricing is the case in the markets. However, it is not routine in terms of the high volume of documents the SPK requested from the brokerages, SPK head Vahdettin Ertaş said yesterday.

“This is a routine operation as the SPK undertakes such probes when extraordinary pricing is the case in the markets. We experienced such a period from May 20 to June 19. However, our latest move is not routine in terms of the high volume of the documents we requested from a number of financial institutions,” Ertaş said. He stressed that the mentioned period was extraordinary for global markets as well as the Turkish market, due to the U.S. Federal Exchange’s recent decision to end the “liquidity party” in the world, as well as the Gezi Park protests.

Fed Chairman Ben Bernanke said May 22 that the U.S. central bank could slow down its bond buying, and on June 19 he said tapering of the program could come by year-end. Turkey’s stock market has plunged 21 percent since May 20 and the Turkish Lira has lost 5 percent of its value against the dollar.
Ertaş said only 2 percent of the transaction volume had been subject to SPK investigations in the last five years, adding that their goal was to protect investors who do transactions correctly, or the 98 percent. He stated that the latest investigation would determine the share of transactions that were against legislation that had taken place over the last month. They will make it public if they find such transactions, he added.

Not only foreign transactions

Ertaş also noted that the investigation did not include only foreign transactions, but local transactions too.

The market volatility coincided with three weeks of antigovernment protests, during which Prime Minister Recep Tayyip Erdoğan repeatedly accused market speculators, which he labeled the “interest rate lobby” of seeking to destabilize the Turkish economy.

“A need has arisen for information in the form of telephone records, written instructions, orders sent over the Internet and all chat logs related to the instructions sent to your institution by foreign clients between May 20 and June 19, information on how orders from your foreign customers were received, and how and through which channels these orders were delivered to the bourse,” the SPK notice reads.

Two more members to be appointed to Turkcell

Meanwhile, touching upon the delicate Turkcell issue, Ertaş said the SPK was ready to appoint at least two more members to Turkey’s leading mobile operator’s board, which have been paralyzed due to ongoing disputes between three shareholders.

As Turkcell has been repeatedly failing to hold its general assembly where the dividends to shareholders should be distributed. The SPK had set a deadline for the company to resolve the issue, but the seven-member board has still been unable to meet.

“Now, we’re in a position to appoint at least two members in a very short period of time,” Ertaş said yesterday.

In an earlier move, the SPK appointed three independent members to the board.

“We had to intervene in the situation, even though we didn’t want to,” Ertaş said. However, he added that Turkcell, with a market value over $13 billion and 89,000 investors, was “not an ordinary” company.