ISTANBUL—Three Turkish ministers resigned Wednesday in the first cabinet fallout over a high-profile corruption case that has rattled the country's political landscape and markets.
Economy Minister Zafer Caglayan and Interior Minister Muammer Guler, whose sons have been jailed pending trial as part of the graft investigation, submitted their resignations to Prime Minister Recep Tayyip Erdogan on Wednesday morning, officials said. Environment and Urban Planning Minister Erdogan Bayraktar, whose son was questioned in the probe, joined them hours later and also tendered his resignation as a member of parliament. The ministers' sons haven't spoken publicly about the case.
The moves also signaled a deepening rift in Mr. Erdogan's government. While the economy and interior ministers joined the premier in condemning the bribery investigation as a plot to weaken the ruling Justice and Development Party, or AKP, Mr. Bayraktar lashed out at Mr. Erdogan.
"I don't accept being pressured because of this investigation, which involves bribery and corruption, and being told to 'resign and issue a comforting statement,'" Mr. Bayraktar said, according to his office. The minister denied wrongdoing. "To soothe the nation, I believe that the prime minister should resign, too," he said.
Turkish markets, which had rallied after the first two resignations, fell sharply when Mr. Bayraktar called on the prime minister to quit.
Speaking to his party members in Ankara, Mr. Erdogan said that his party won't bow to what he called an international smear operation.
"We act according to the laws, and we will continue to do so. We will clean up possible rotten parts…If some small dark spot has emerged on our record and draws attention, it's only because our record is so clean white," Mr. Erdogan said, adding that he won't accept any accusation against his government until the investigation has concluded.
The premier's spokesman didn't return repeated calls for comment.
Earlier in the day, the other ministers who quit echoed Mr. Erdogan's allegations that the probe was politically motivated.
"It is very clear that the operation performed as of Dec. 17 is a dirty setup against our government, our party and our country. I have resigned from my post of economy minister to help bring out the truth and spoil this ugly game, which has included my child and my close colleagues," Mr. Caglayan said in a written statement, according to his spokesman, who declined further comment.
Mr. Guler resigned minutes after the economy minister. "I had asked the prime minister to dismiss me [Dec. 17] and submitted my written resignation today," he said in an emailed statement that echoed Mr. Caglayan's.
After Mr. Bayraktar's comments, Turkey's benchmark BIST-100 stock index reversed gains, falling 3.5% to 66555.3 in afternoon trading. The lira declined 0.5% to 2.0876 against the dollar, creeping toward Friday's record low. The government's borrowing costs rose as its benchmark two-year bond yields pared gains to 9.60% from 9.42%, after closing at 9.68% Tuesday. Bond yields decline as prices rise.
"With the two ministers' resignations in the morning, the lira gained because the market saw it as a positive step that would reduce prevailing political uncertainties. But the third minister's resignation, and call on the prime minister to step down, deteriorated investor sentiment," said Gokce Celik, an economist at Finansbank in Istanbul. "Turkey's lira has been under extra pressure recently due to domestic political uncertainties... it's going to be difficult for it to stabilize as the year draws to an end."
Prosecutors, who unveiled a wide-ranging corruption investigation Dec. 17, have said they plan to charge at least 24 jailed suspects with bribery, money laundering and gold smuggling, among other misconducts.