Turkish authorities on Friday arrested Erkan Kilimci, a former official at the Turkish Central Bank, as part of a broad investigation into an alleged "Ponzi" financial fraud scheme. Kilimci previously served as CEO of Tera Finansal Yatırımlar Holding, a subsidiary
of Tera Holding, central to the inquiry. He had announced his resignation last week, stating he had only been in the position for three months and expressing regret at being included in the investigation. Investigations have so far led to the
arrest of approximately 45 individuals, including Emre Tezmancı, Chairman of Tera Holding, along with several board members and executive managers from his associated companies. In a parallel move, Tezmancı's assets and those of dozens of other executives implicated in the
financial scandal have been frozen. A "Ponzi" scheme is recognized as a prominent form of investment financial fraud, relying on attracting victims with promises of exceptionally high, quick, and guaranteed returns, without any real underlying investment or business activity to support
them. The scheme is named after the Italian swindler Charles Ponzi, who implemented this trick in the United States in 1920, accumulating millions of dollars before his deception was exposed. Estimates indicate nearly half a million investors have been affected by
the recent market collapse, resulting from the inability of some asset managers, such as Tera, to meet redemption requests amidst massive cash outflows last week. Financial experts explained that some funds involved focused investments on illiquid shares to inflate prices,
then borrowed short-term funds using those overvalued shares. These funds, until recently, reported exceptional triple-digit annual gains. Turkish authorities began meetings on Thursday to discuss how to proceed with the liquidation of approximately 131 investment funds implicated in the case. Kilimci
previously served as Deputy Governor of the Turkish Central Bank from 2016 to 2018, before becoming Deputy CEO for Treasury at the state-owned Türkiye Halk Bankası.
