Türkiye Sigorta Shares Plunge as Top Executives Arrested Amid Sweeping Turkish Market Manipulation Probe

Shares of Türkiye Sigorta AS extended their sharp losses following local media reports that two of the state-backed insurance company’s top executives were arrested as part of a sweeping and escalating investigation into allegations of market manipulation involving Turkish investment funds.

Chief Executive Officer Taha Cakmak and his deputy, Gurol Sami Ozer, were detained earlier this month, according to the state-run Anadolu Agency. The company’s shares have been hit hard by the developments, tumbling 18% over a two-day period and plunging to their lowest levels in almost two years. The ongoing regulatory and judicial scrutiny has severely shaken investor confidence in one of the country’s prominent financial institutions.

Broadcaster NTV reported allegations that Türkiye Sigorta, a state-backed insurance firm, had steered substantial cash reserves into funds managed by Tera Portfoy Yonetimi, the brokerage firm sitting squarely at the center of the unfolding fund crisis, citing sources it did not identify. In response to the legal actions and public allegations, Ersin Yucel, the defense lawyer representing Cakmak, stated that his client has firmly denied all allegations of wrongdoing and is actively planning to appeal the arrest.

Cakmak and Ozer join a rapidly growing list of prominent figures from Turkey’s broader finance scene who have been detained or arrested as authorities attempt to get a firm grip on a market crisis that has heavily battered local stock and bond markets. Prosecutors leading the investigation have stated they are looking into a vast scandal in which local investment funds allegedly bought up shares in frequently obscure, small-cap companies and then artificially inflated their market values many times over through coordinated trading schemes.

Justice Minister Akin Gurlek addressed the scope of the crackdown in a social media post earlier this month, confirming that a total of 88 suspects have been arrested thus far as the judicial inquiry widens across the financial sector.

Istanbul-based Türkiye Sigorta did not respond to multiple phone calls and emails sent by reporters seeking comment on the arrests, the market sell-off, or the underlying allegations. The firm is 76%-owned by Turkey’s sovereign wealth fund, an institution whose chairman is Turkish President Recep Tayyip Erdogan, underscoring the high-profile and sensitive nature of the state involvement in the company.

Cakmak, a former bank regulator and former deputy governor of the Turkish central bank, had previously overseen a company that quickly transformed into a darling of the country’s stock market. Since his appointment to the top post in 2023, Türkiye Sigorta shares experienced an astronomical surge, climbing more than 500% through a market peak reached in May. During that rally, the insurance provider consistently outperformed almost all other listed companies on the benchmark Borsa Istanbul 100 Index, drawing widespread praise from retail and institutional investors alike.

However, the trajectory of the stock shifted dramatically in September. The equity entered a severe freefall, erasing more than 40% of its total market value amid mounting whispers of regulatory investigations and market irregularities. Amid the escalating pressure, Türkiye Sigorta formally announced Cakmak’s resignation on October 15. Following the leadership shakeup, the company elected to postpone its third-quarter financial results, which had originally been scheduled for release on October 19. The crisis deepened further when the company’s board of directors announced on Monday that it was also terminating deputy CEO Ozer.

Türkiye Sigorta was originally established through a corporate merger in September 2020, which combined the insurance subsidiaries of several state-owned Turkish banks. The firm has expanded its footprint rapidly since the consolidation and currently commands the largest share of the Turkish insurance market, according to corporate investor presentation data released on October 21.

Regulatory filings and market data indicate that investment funds overseen by Tera Yatirim Menkul Degerler AS were among the institutional shareholders holding positions in Türkiye Sigorta. According to the records, these funds acquired at least a portion of their shareholdings in August, a timing that places the transactions right before the wider financial scandal erupted into public view and triggered regulatory intervention.