THE POLITICAL COST OF DELAYS IN FUND LIQUIDATION

When the fund crisis emerged, our recommendation was clear: Begin liquidation and recovery at the same time. While converting the funds’ assets into cash, also pursue assets found to have been unlawfully transferred out of the funds. To do this, use the recovery powers provided by Law No. 6183.

It was not until late October that TMSF was granted some of these powers. The administration must now explain when and to what extent it has used this authority.

Freezing assets is not the same as recovering money. Nor does recovering money mean it has been paid to investors. The administration must regularly publish four figures for each fund:

The loss identified,

the amount being pursued for recovery,

the amount actually recovered and

the amount paid to investors.

Publishing these figures would reveal where the delays are occurring and which institution is responsible.

The full list of individuals and organisations found by the competent authorities to have made excessive gains must also be disclosed. The state must explain which gains it considers excessive and by what criteria.

TBMM must establish an explicit legal basis for publishing the names and amounts.

Who is expected to repay how much,

how much has been repaid voluntarily and

how much has been recovered must be shown separately.

A finding of excessive gains must not be confused with a final determination of legal liability.

Many names are circulating in the market today.

If you do not disclose verified information, repeated allegations will eventually come to be treated as facts in people’s minds.

This damages the reputations of those who have been unfairly named. It also raises doubts about whether the same rules are being applied to those against whom there are concrete findings.

All managers found to have been involved in these transactions, or strongly suspected of involvement, must be temporarily suspended from their duties by the competent authorities. Suspension is not a punishment. It is a measure to ensure that the investigation is conducted independently and that records are preserved. No one should be suspended on the basis of rumour, but where there are strong grounds for suspicion, no one should be exempt, whatever their title.

Liquidation and recovery must be entrusted to a new team that played no part in the earlier transactions.

Managers/experts who previously carried out this work, or who made or implemented the decisions under review, must not be part of the team tasked with examining those decisions. The new team’s authority, responsibilities and timetable must be clear. The public must know who is responsible for which task and what results they have achieved.

Every delay requires new measures. Every new measure whose rationale goes unexplained breeds fresh doubts. There is no structure that doubt and uncertainty cannot bring down.

Today, investors are demanding an account of their money. Tomorrow, voters will ask why that account was not provided in time.

If you do not speed up recovery, disclose verified information, hand the process over to a new team and act transparently, the loss of trust will carry a political cost.

Prof. Dr. Mete Gündoğan

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