Turkish authorities announced that several senior financial-sector executives had been arrested, while others had been banned from leaving the country, as part of an investigation into large-scale capital outflows from certain investment funds this week. The authorities’ interventions helped the Istanbul Stock Exchange recover on Thursday, recouping some of the sharp losses suffered the previous day.

Muhammed Yariz, chairman of Pusula Portföy Yönetimi AS, was arrested, according to a statement from the Istanbul Chief Public Prosecutor’s Office.

Among those detained is businessman Altunc Kumova, chairman of Destek Holding, who is considered one of the wealthiest people in Turkey, after shares in some of his companies rose by several thousand per cent over the past year.

Also detained were İbrahim Bekçi, deputy chief executive of Tera Portföy Yönetimi AS, and Namım Kemal Gökalp, chairman of Hedef Holding AS.

A ban on leaving the country was imposed on Tera Holding chairman Emre Tezmen and Serdar Turhan of Pusula Holding, as well as Kemal Akkaya, chairman of Bulls Yatırım Menkul Değerler AS, and Enver Çevik, chairman of parent company Lydia Holding.

Earlier on Thursday, Turkish authorities ordered the liquidation of 130 investment funds managed by seven portfolio management companies, including funds belonging to Tera and Pusula.

The total value of investments in the funds placed into liquidation stood at approximately $18bn by Wednesday evening, while more than 350,000 investors are reportedly exposed to them, according to a person familiar with the matter, who requested anonymity because the information has not been made public.

The swift intervention by Turkish authorities to restore liquidity and contain pressure on investment funds helped the Istanbul Stock Exchange recover on Thursday, following the sharp sell-off of previous days. The BIST 100 index had fallen 5.54% on Wednesday as concerns intensified over outflows from funds and the difficulties some managers were facing in meeting redemption requests. Following increased repo funding by the central bank, regulatory interventions and the decision to liquidate troubled funds, the BIST 100 recovered 2.95% on Thursday, closing at 13,509.76 points.

The market viewed the measures as a sign that the authorities were seeking to contain the risk of the crisis spreading, although investors and analysts remain cautious about the duration and extent of the recovery.