An intervention carrying weighty political ramifications was delivered by Ersin Çelik, Head of Digital Editions for the pro-government newspaper Yeni Şafak.
The prominent journalist sounds the alarm for the country's leadership and President Recep Tayyip Erdoğan, issuing an open warning that impunity surrounding the massive stock market scandal involving Tera Fon and Pusula Holding could ignite uncontrollable public fury leading to political overthrow.
The 20-billion-dollar fraud, with more than 500,000 victims, including pensioners, civil servants, and small business owners, is not merely an economic crisis, but a ticking time bomb beneath the foundations of the political system.
As Ersin Çelik emphasizes, if the state fails to deliver justice and penalize those responsible, public confidence in politics will collapse entirely.
The «Ukraine scenario» and the danger of political upheaval
The primary concern articulated by Ersin Çelik is the likelihood of opening the path for a non-political figure to rise to power, precisely as occurred in Ukraine with the ascent of Volodymyr Zelensky.
Accumulated distrust and the perception that «all politicians are the same» may drive the younger generation and disillusioned citizens toward outright rejection of the regime.
The journalist stresses that citizens suppress their financial hardships due to geopolitical challenges, yet their fury over the unrestrained speculation of privileged circles could manifest as severe «political retribution».
An early signal was already delivered in the recent local elections, where abstention among pensioners caused the ruling party AKP to lose major municipalities, as in the case of Uşak where Özkan Yalım of the CHP prevailed.
Citing the characteristic remark by Ismail Kılıçarslan, Ersin Çelik warns that the base that once devotedly backed Recep Tayyip Erdoğan now feels indignant, believing certain actors are exploiting its trust.
To avert political upheaval, the columnist calls upon the Turkish President to act immediately, remove those undermining his standing, and bring to justice both the orchestrators of the fraud and those who turned a blind eye.
The stakes of the investigation, he concludes, transcend vindicating the victims and directly concern the very future of the country and its governance.
What has unfolded
An unending nightmare is unfolding in the neighboring nation, as illusions of the Turkish economic «miracle» dissolved within a matter of days, uncovering a colossal financial scandal, a monstrous Ponzi-style scheme, and a market plunging into utter chaos.
Within a mere 48 hours, approximately 30 billion dollars vanished from the stock exchange of Turkey, while 450,000 unsuspecting investors now face complete ruin and the loss of a lifetime's savings.
The illusion of mythical returns cultivated over the preceding period proved to be a lethal trap.
A prime example is the flagship fund of Tera, which posted an unrealistic surge exceeding 60,000% within just three years.
Similarly, Destek Finans Faktoring transformed within 17 months into the second-largest listed corporation in the country, watching its share price gallop by 7,000%.
All this, as revealed, was a calculated game of market manipulation.
Fund managers acquired thinly traded equities and stakes in their own subsidiaries to artificially inflate prices.
Subsequently, they leveraged these overvalued equities as collateral to borrow further and inflate the bubble, attracting masses of unsuspecting citizens seeking refuge from the country's crushing inflation.
When the bubble inevitably burst, the emergency exits led to a dead end.
Tera and other managers were unable to return capital to investors.
On September 16, the primary stock index dropped by more than 5%.
In a state of panic, the Turkish regulatory watchdog initiated the liquidation of 131 investment funds managing 18 billion dollars, trapping 450,000 investors in an agonizing wait to see if they will ever recover even a fraction of their capital.
The wave of arrests by the police is sweeping.
Dozens of financial sector executives have been brought before justice, including the chairman of Tera, confronting grave charges of securities fraud, while the assets of others have been frozen.
Nevertheless, indignation is boiling over as revelations show that warnings were systematically disregarded.
Finance Minister Mehmet Simsek was aware of indications of manipulation, while index provider MSCI had cautioned since June regarding a downgrade of Turkey to frontier market status, alongside much smaller economies such as Tunisia and Romania.
Even darker facets of the affair are coming to light, as those who attempted to expose the truth were silenced.
A former deputy director of the financial crimes investigative agency was arrested twice by police for protesting the practices of Tera, while the firm itself issued threats against journalists and social media users.
Despite reassuring statements by Mehmet Simsek pointing to «a few bad apples» and the total absence of systemic risk, alongside the posture of managers such as Viktor Szabo of Aberdeen, the damage to the nation's credibility is permanent.
The ambitions harbored by Recep Tayyip Erdoğan to establish Istanbul as a global financial center have sustained a critical blow.
Timothy Ash of RBC BlueBay Asset Management depicts the Turkish market as a «Wild West», posing the unyielding question of how anyone can place trust in the nation's regulatory environment.
Analysts emphasize that authorities must thoroughly investigate allegations indicating that the perpetrators of this tragedy enjoyed high-level political shielding from the inner circle of Recep Tayyip Erdoğan.
Meanwhile, ordinary Turkish citizens, impoverished by inflation that exceeded 80% in 2022 and remains pinned near 30%, pay the steepest toll.
In their endeavor to escape the rising cost of living, they became entrapped in the net of ruthless speculation, discovering in the most agonizing manner that when a stock promises a 7,000% return, the future holds not profits, but complete devastation.
Echoes of Greece...
The collapse unfolding across the Turkish capital market with Ponzi-type structures and surreal returns revives memories of our own enduring scar: the great scandal of the Athens Stock Exchange in 1999.
Looking back at the historical record, the parallels are nearly identical, as the mechanics of collective euphoria and subsequent ruin remain unchanged over time:
Just as share prices of certain companies in Turkey skyrocketed today by 7,000% or 60,000%, in Greece in 1999 bubble stocks (the infamous «junk» equities) recorded consecutive daily ceiling limits.
The surge was presented as an uninterrupted economic wonder.
In Turkey, citizens seek refuge in the stock market to preserve wealth against punishing inflation between 30% and 80%.
In the Greece of Costas Simitis during the late 1990s, amidst a period of economic transition and anticipation surrounding entry into the Eurozone, hundreds of thousands of households (individuals lacking any investment education, from farmers to homemakers) committed lifetime savings, perceiving the stock market as the sole avenue to rapid wealth creation.
In the Turkish crisis, fund managers purchased thinly traded shares of their own subsidiaries to artificially inflate valuations.
In Athens during 1999, the identical game was played via parallel markets, fictitious blocks, circular trades among majority stakeholders, and fabricated balance sheet metrics for companies that were essentially empty shells.
Just as the Turkish capital markets board and the government stand accused today of significant delays in stepping in, ignoring warnings, and potentially providing political shielding, Greek regulatory authorities in 1999 reacted only after the bubble had expanded uncontrollably, while the political establishment openly encouraged public participation in the market.
In Turkey, the implementation of trading boundaries sparked panic, closed liquidity channels, and wiped out 30 billion dollars.
In Greece, the collapse of the General Index from 6,350 points destroyed over 100 billion euros in present-day values, leaving hundreds of thousands of retail investors trapped with entirely worthless portfolios.
Just as occurred in Athens back then, so too in Ankara today, the hardest lesson remains identical: whenever market yields appear too favorable to be genuine, they almost invariably constitute a wide-open trap.
www.bankingnews.gr
Σχόλια αναγνωστών