Amendments by Capital Markets Board and Amendments to Turkish Commercial Code

In accordance with the Official Gazette dated 31.12.2020 and numbered 31351, the Capital Markets Board's ("CMB") new Communiqué on Exclusion from Partnership and Selling Rights numbered II-27.3 ("Communiqué") entered into force and also in accordance with the Law No. 7262 on the Prevention of the Financing of the Propagation of Weapons of Mass Destruction, amendments have been made to the provisions regarding bearer shares in the Turkish Commercial Code ("TCC") numbered 6102.

Summaries of both subjects are provided below.

Communiqué on Exclusion from Partnership and Selling Rights

• On 28 October 2020, a draft of this communique was published. The most notable changes contained in this Communique were the equalization of the right to exclude from the partnership and the right to sell, and the reduction of the threshold required for excluding from the partnership from 98% to 95%. However, the published Communique shows that the threshold required for excluding from the partnership remains at 98%.
• It has been accepted that the following persons act together in the determination of share purchases that will give rise to the right to exclude and sell shares:
• Partnerships in which real and/or legal person partners have management control.
• Real persons and/or legal entities holding management control on legal person shareholders and partnerships over which these persons have management control.
• In determining the ratio of voting rights, it has been regulated that direct and indirect shares owned by the controlling shareholder[1] will be taken into account whereas privileges regarding voting will not be taken into account, and shares based on usufruct or purchase right and the right to issue cannot be used.
• It has been stated that in paid capital increases in which the rights to receive free and / or new shares are not restricted, the right to sell and remove from the partnership will not arise due to the shares acquired by the existing partners or due to inheritance, bought back shares, freezing of voting rights.
• In addition, it has been accepted that in case management control is obtained simultaneously with the emergence of the right to exclude and sell, the takeover bid obligation will not arise.
• Finally, with this Communiqué, it is regulated that the usage fees of the exclusion and sale rights will be calculated according to the same formula: The fee for the use of the exclusion and sale rights is paid in full and in cash in Turkish Lira.
• It has been stated it will be taken into consideration for partnerships whose shares are traded on the stock exchange;

(i) In partnerships whose shares are traded on the Star Market, the last month before the date of the public disclosure of the rights; for companies whose shares are traded in markets and platforms other than Star Market, the arithmetic average of the daily corrected weighted average prices in the stock exchange in the last six months prior to this date and the average of the value determined in the valuation report prepared to determine the price for each share group, and

(ii) The higher of the mandatory takeover bid price, which must be calculated within the framework of takeover bid regulations, in case the acquisition of the position of controlling shareholder simultaneously leads to a change in management control,

• It has been stated it will be taken into consideration for partnerships whose shares are not traded on the stock exchange;

(i) The value determined in the valuation report prepared to determine the price for each share group, and

(ii) In case the acquisition of the position of controlling shareholder simultaneously leads to a change in management control, the higher of the mandatory takeover bid price, which must be calculated within the framework of takeover bid regulations.

• In the event that it has been disclosed to the public that the controlling partner position has gained or has received an additional share before 31 December 2020, the usage fee of the rights will be determined according to the abolished Communiqué.

Turkish Commercial Code

• It has been stipulated that the Ministry of Trade may require the share ledger, board of directors’ resolution book and the book of general assembly meeting and discussion to be kept electronically. The effective date of this change is the publication date of the Official Gazette.
• It has been stated that the Board of Directors shall arrange the list the owners of bearer shares to be included in the “list of attendants” for the general assembly meetings according to the shareholders’ chart provided by the Central Registry Agency (“CRA”).
• The obligation to notify the CRA is introduced in case of issuance of bearer share certificates. In addition, in order to exercise the rights arising from the share ownership of bearer share certificate against the company or third parties, and in the transfer of bearer shares, the shareholder has to make a notification to CRA.
• Those who prove that they are the owner of the bearer share certificate and notify the CRA will be able to use their rights arising from the share ownership against the company. In this context, with the abolition of the article TCC's 415/3., the opportunity of attending the general assembly meetings by the owners of bearer share certificates in joint stock companies, proving that they are only the possessor of the certificate, has been also removed.
• Individuals holding bearer shares certificates are obliged to apply to the joint stock company with share certificates in order to be notified to the CRA until December 31, 2021. Upon the application, the board of directors of the joint stock company will notify CRA on the information regarding those possessing bearer share certificates and their shares within five working days. In case the shareholders do not apply to the joint stock company, they will not be able to use their rights arising from the TCC until the application is made, and if the above-mentioned application or notifications are not made, according to the article 562/13 of the TCC, an administrative fine (this administrative fine ranges from five thousand to twenty thousand Turkish lira) will be imposed.

If you have any questions about these amendments, we would be glad to assist you.

[1] It refers to real or legal persons who own at least % 98 of the voting rights of the partnership alone or together with the persons with whom it acts.