The former Turkish Minister for Family and Social Affairs, Fatma Betül Sayan Kaya, was remanded in custody early this morning on charges of membership of a criminal organisation and breaching capital markets legislation, as part of the investigation into the investment fund fraud scandal in Turkey.
The investigation into the collapse of 131 investment funds affecting half a million investors, led by the Istanbul Chief Public Prosecutor’s Office, has taken a new turn in recent hours with the arrest of Kaya, a former minister and MP until 2023 for Erdoğan’s AKP party; according to the charges against her, she is alleged to have made substantial profits – estimated at 2.2 billion liras, nearly 40 million euros – through financial transactions carried out whilst she held the post of deputy chair of the Justice and Development Party (AKP).
As part of the proceedings, the former minister, her husband, İlyas Kaya, and the former chairman of the Capital Markets Board (SPK), İbrahim Ömer Gönül, appeared yesterday before a court in Istanbul to give evidence as suspects, according to reports in the Turkish media.
According to these reports, the prosecution requested that the former minister be remanded in custody on suspicion of “membership of an organisation formed for the purpose of committing crimes” and “breach of the Capital Markets Law”. Subsequently, Kaya was brought before the duty judge, who ordered her remand in custody, which took effect in the early hours of today.
Judicial supervision and a ban on leaving the country for the minister’s husband
Meanwhile, the public prosecutor’s office also completed proceedings relating to İlyas Kaya, the former minister’s husband, requesting that he be subject to precautionary measures of judicial supervision, including the obligation to appear regularly before a court, as well as a ban on leaving the country.
The same measures were requested for İbrahim Ömer Gönül, former chairman of the Turkish Capital Markets Board (SPK) and sacked summarily from his post on 20 October by order of the President of Türkiye, Recep Tayyip Erdoğan, following the judicial investigation opened against him.
The stock market transactions under investigation by the public prosecutor’s office
According to the document submitted by the Istanbul public prosecutor’s office requesting the arrest of the former minister, on 8 April 2026 Kaya acquired a total of 250,000 shares in the Turkish shipping company Özata Denizcilik – a company listed on the stock exchange under the code OZATD – at a price of 255 liras per share, amounting to a total outlay of 63.3 million liras; she subsequently sold them to the well-known Turkish investment firm Tera Yatırım Menkul Değerler A.Ş. (TERA) at a price of 4,482 liras per share via a bank transaction carried out on 16 September. The proceeds from the sale of these shares were credited to the former minister’s account on the same day.
The prosecution notes in its report that the transaction was carried out using the unusual T+0 procedure, rather than the standard T+2 settlement period – which involves waiting two working days to receive the proceeds from a share sale – and further emphasises that the transaction took place just one day before the intervention carried out on 17 September by the SPK, which froze and liquidated the 131 investment funds under investigation.
Allegedly, the former minister not only used inside information to carry out the transaction in time, but was also able to receive the money immediately; had the normal procedure been followed, Kaya would have received the money on 18 September and by then would not have been able to withdraw it due to the measures taken the day before by the Turkish financial authorities.
The Istanbul Public Prosecutor’s Office states that the Capital Markets Board (SPK) has drawn up a report concluding that Kaya had inside information not disclosed to the public, and that she used it to offload her investments in time and make extraordinary profits, resulting in a return on her investment of over 1,657%.
The massive fraud orchestrated by the “Goldman Sachs of Turkey”
The investment firm TERA, through which the minister operated – and which once aspired to become “the Goldman Sachs of Turkey” – is at the very heart of the investment fund scandal for having organised a scheme involving massive market manipulation and Ponzi-style fraud.
It has been revealed that TERA organised a scheme to buy and sell shares amongst its own funds in order to artificially inflate the prices of its investment portfolios (for example, by inflating the share prices of companies such as Özata Denizcilik far above their real value) and to record fictitious profits, which it used to attract thousands of new investors.
Late on 16 September, TERA collapsed as it was unable to meet its clients’ requests for cash withdrawals due to a serious liquidity crisis, caused by extreme indebtedness and the accumulation of ‘junk shares’ with a fictitious value. The following day, the SPK suspended its listing on the Istanbul stock exchange and, shortly afterwards, TERA was placed under the administration of the Turkish State Deposit Insurance Fund (TMSF).
A corruption and fraud scandal rocking Erdoğan’s AKP party
Fatma Betül Sayan Kaya served as Turkey’s Minister for Family and Social Services between 2016 and 2018 and, until last September, held the post of deputy chair of the AKP. From the outset, her name has been at the centre of the investment fund scandal in Turkey, which has also implicated other figures close to Erdoğan’s government.
After her financial dealings with the seized investment funds and the profits she had made came to light, on 26 September Kaya tendered her resignation as deputy chair of the party. On 5 October, the Kayas returned the 1.34 billion liras (24.2 million euros) obtained by the former minister and the 826 million liras (14.8 million euros) received by her husband, under a ‘repentance’ scheme’.
This, however, has not prevented the public prosecutor’s office from continuing its investigation. Furthermore, the opposition ‘New Party’ is demanding payment of double the amount obtained by the former minister and her husband, as stipulated by law in cases of illicit enrichment.
Subsequently, on 7 October, the AKP announced that Kaya is no longer a member of the party and that she no longer has any ties to the political organisation. That same day, the former minister gave a statement as a suspect as part of the investigation, and on 5 November she appeared again in court, where she denied the allegations; she was remanded in custody in the early hours of 6 November by court order.
The former Turkish Minister for Family Affairs was jailed just a few hours after the Turkish President, Recep Tayyip Erdoğan, assured the media that all those implicated in the scandal involving market manipulation and massive fraud through investment funds, as well as those who have obtained illicit gains, will be brought to justice. “People from whom you would never have expected such a thing have been implicated in this,” Erdoğan told journalists on board the presidential aircraft whilst returning from South Korea.
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Edited and reviewed by:
Pablo Gómez is a specialist in Turkey and has been editor-in-chief of Hispanatolia since 2011. He has been analysing current affairs and geopolitics in Turkey and the surrounding region since 2006.
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