Category: Turkiye

Ali Selim Demirel has been promoted to Partner at the Esin Attorney Partnership in Turkey.

Demirel, who focuses on M&A and Dispute Resolution, has been with the Esin Attorney Partnership — the Turkish firm working in association with Baker McKenzie — for nine years, after spending three years with Pekin & Bayar.

“Experience in post-M&A disputes is an invaluable asset for an M&A lawyer,” said Eren Kursun, Head of M&A at the firm.  “Many lawyers can draft brilliant M&A documents, but few have a genuine understanding of how those documents will be interpreted. Ali is one of those few, and I am proud to welcome him as a partner in our M&A practice.”

BTS & Partners has advised TechOne Venture Capital and Twozero Ventures, funds managed by Actus Asset Management, on an unspecified investment in FineDine Digital Menus for Restaurants, Cafes & Bars.

According to BTS & Partners, “FineDine provides data-driven digital menus for a smarter and more profitable dining experience.” Other investors included 500 Istanbul and Savour VC, and angel investors Hande Enes, Cenk Serdar, and Lovrenc Kessler. 

The BTS & Partners team was led by Senior Counsel Okan Arıcan.

The firm did not reply to our request for more information.

Turkey’s Aksan Law Firm has advised Albaraka Asset Management on its investment in Clotie, an e-commerce company that provides personalized clothing services.

Albaraka Asset Management — which does business as APY Ventures — invests in technology start-ups through its funds.

The Aksan Law Firm team was led by Partner Melih Aksan, working with Associates Aksan Taiha and Ozgur Aydin.

Aksan did not reply to our inquiry.

An interview with Asli Basgoz of White & Case and Emre Ozsar of GKC Partners about their firms’ work on the CEE 2019 Deal of the Year for Turkey: Sisal’s successful bid to operate the Turkish State Lottery.

CEELM: First, congratulations on winning the Deal of the Year Award for Turkey!

Asli: Thank you for awarding it to us! 2019 was a landmark year for White & Case and GKC Partners in Turkey. In addition to winning the Deal of the Year from CEE Legal Matters, our M&A team had the opportunity to work for exceptional clients (like Sisal) on many other deals. We are honored to have our work and the significance of this deal recognized by colleagues and being selected as Deal of the Year for Turkey. In fact, it was a very active and successful year across our practices, including in M&A, for which the two of us are responsible. We were able to work with clients in sectors including infrastructure, energy, e-commerce, the acquisition of a major quick service restaurant chain and manufacturing. We have a lot of know-how in these sectors and there are sectors in which investors remain interested.

The feedback we get from clients and observers continues to make us happy. For 2019, we were named “Turkey M&A Legal Adviser of the Year” by MergerMarket European M&A Awards and we were ranked as the only Tier 1 foreign law firm in Turkey among all of the global firms in the market by Legal 500. And clients and observers gave us top rankings across all our practices including in legal publications such as Chambers and Legal 500.

Also, 2020 marks White & Case’s 35th year in Turkey, an important milestone for our firm and for Turkey. It demonstrates the firm’s approach to key markets like Turkey: a long-term commitment and belief in Turkey as a very important and strategic market. Accordingly, this year White & Case has promoted Emre Ozsar to partner. His partnership is a reflection not just of his own expertise, hard work, personal successes, and strong client relationships, but of the successful results achieved by our entire M&A team.

CEELM: How did White & Case and GKC Partners get the mandate in the first place – why did Sisal S.p.A choose the firms to assist it in this matter?

Emre: Sisal engaged White & Case based on its experience and reputation in the market and its relationship with CVC Capital Partners. Sisal S.p.A is a portfolio company of CVC Capital Partners. It was a pleasure for our team to work with theirs, as Sisal is experienced (it is the first Italian company in the gaming sector, having started in business in 1945), has innovated in its sector for over 70 years, and approached this opportunity strategically.

CEELM: Can you describe the deal for us briefly, and your firms’ roles in making it happen?

Asli: Milli Piyango is Turkey’s national lottery, first established by law in 1939 and continuously operated by the government since that time. It is an iconic brand, which is known by everyone in Turkey. The Milli Piyango license was transferred in 2017 to the Turkey Wealth Fund. The TWF is the asset-backed development and wealth fund of the Republic of Turkey that was established in 2016. The TWF’s mission is to increase the value of Turkey’s strategic assets to provide resources for Turkey’s primary investments.

This was a challenging task for TWF not only because of the two previous attempts to privatize Milli Piyango but also because this was the first significant commercial project which TWF took in line with its mission.

The TWF wanted to increase the benefit of Milli Piyango to Turkey by maximizing its revenue. It believed that doing that would require investment and innovation in operational performance, including expanding offerings to customers in its retail and online businesses.

The TWF decided to run a competitive auction to offer qualified parties the right to provide ten years of operational services to Milli Piyango. The TWF’s terms required bidders to guarantee a level of financial performance, innovation, and investment in return for sharing in the revenues of Milli Piyango. At the end of the operational period, the TWF would take back Milli Piyango’s operations together with the innovations and investments made by the operator. All the while, the Milli Piyango license, with the rights and responsibilities that come with being license holder, would remain with the TWF.

Emre: Sisal bid in the auction together with a Turkish joint venture partner, Sans Dijital ve Interaktif Hizmetler Teknoloji Yatirim A.S, a subsidiary of Demiroren Holding, through a company they established together called Sisal Sans Interaktif Hizmetler ve Sans Oyunlari Yatirimlari A.S. Sisal Sans was the winning bidder and signed the operational contract with the TWF in August 2019.We assisted Sisal through the entire process, including with the legal, regulatory, and tax aspects of the bidding, negotiation of the operational contract, the shareholders’ agreement between the joint venture parties, and the software and IT services agreement between Sisal and Sisal Sans. We believe our work helped Sisal reach a successful result in its first investment in Turkey.

CEELM: In your submission for Deal of the Year you noted that the Turkey Wealth Fund attempted to privatize the lottery twice before – both times unsuccessfully – leading it to pursue this creative structure, which did not involve privatization. Why was this model more successful than the previous attempts?

Asli: Just to clarify, the previous attempts were made not by the TWF but by the Privatization Authority.

The previous attempts tried to privatize Milli Piyango and required the Milli Piyango license to be transferred to the winning bidder and the bidder to pay to acquire the license and all of the rights under the license for the license period. We think that the structure was challenging because it meant the winning bidder had to finance a substantial upfront license fee before it had any revenue or was certain of the revenue stream. And that meant less financing left over for investment and innovation. Also, license transfer is more difficult from a legal and regulatory perspective.

This structure is innovative because it does not require the operator to acquire the license, only operational rights, and permits the operator pay for those rights through its guaranteed investments and the revenue it guarantees to the TWF. The structure aligned well with the mission of the TWF to increase revenue and innovation in a sustained manner and with the commercial and strategic vision of Sisal Sans.

CEELM: What was the significance of the deal, ultimately?

Emre: We think the deal is significant for many reasons. First, it was the first major commercial transaction undertaken by the TWF after its establishment. Second, it was a competitive international tender that attracted interest from Turkish and international bidders. Third, Milli Piyango was an exceptional opportunity. There are few national operators of lotteries and games of chance of this size and that present this opportunity for operators. Fourth, Turkish consumers who like to play the lottery and games of chance will have access to new numerical games, instant lotteries, and online games across a retail network of more than 10,000 points of sale and online. Finally, the TWF will have increased the value of Milli Piyango, which is a strategic asset in its portfolio, and generated additional revenue and innovation for Turkey during the operational period.

For us, the deal was significant for many reasons too. White & Case and GKC Partners had the opportunity to work on an innovative and important transaction, with a very capable team of professionals at Sisal, to collaborate closely with Sisal’s joint venture partner, Sans Dijital, and to help put together a winning bid and to negotiate a contract that will hopefully benefit our client, the TWF, and, ultimately, Turkey. White & Case and GKC Partners like to do the kind of work that ticks all of these boxes.

We want to thank the entire team from White & Case and GKC Partners: the Istanbul team consisting of Tax Consultant Hakan Eraslan, Competition Advisor Sezin Elcin Cengiz, and Associates Ece Kuregibuyuk, Asli Gulum, Irem Kurkcu and Selin Kaledelen, and the Frankfurt team consisting of Local Partner Michael Leicht and Associate Carola Van Wesel. This deal required teamwork and showcased a strong team from our Corporate, Tax, IT, and Competition practices.

This Article was originally published in Issue 7.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Bora Kaya, the former Managing Legal Counsel at Gama Power Systems Engineering and Contracting, has become Chief Legal Officer of Gama Holding.

Kaya first joined Gama Power Systems Engineering and Contracting in March 2015. He was the Head of Legal at Ronesans Holding from October 2012 to December 2014. Earlier still, he was Assistant to the Head of Legal at Eregli Iron and Steel Works Co.

Following Kaya’s promotion, Emine Hande Mutlu was appointed Legal Counsel of Gama Power Systems Engineering and Contracting Inc. and Esra Berktas was appointed Legal Counsel of GAMA Industrial Plants Manufacturing and Erection Inc. 

Kaya declared himself pleased with the promotion: “I would like to thank Gama Holding’s Executive Board for their trust in handing me over the helm of the group’s legal function, especially during these difficult times.”  

In 2016, Kaya reflected on his career leading up to that point in an interview with CEE Legal Matters.

Altug Ozgun, Astella Pharma’s Ethics & Compliance Director in Turkey, is joining the recently established Cetinkaya Attorneys-at-Law firm as a Partner. 

Ozgun joined Astellas Pharma in January 2017 (as reported by CEE Legal Matters on January 16, 2017). Prior to that, he was the Head of Legal & Compliance at Sandoz from 2014 to 2017, the Compliance & Legal Manager at Beckman Coulter from 2012 to 2014, and a legal counsel & board member of East Pharma from 2005 to 2011. Before moving in-house, he worked with the Ozgun Law Firm. 

Cetinkaya Attorneys-at-Law was founded earlier this year by former Moroglu Arseven Partner Orcun Cetinkaya. 

 

Antitrust authorities follow closely the transformation in communication technologies with the intent to preserve the efficiency of their investigative practices and evidence search, during handling their cases. Otherwise the authorities will be on the verge of losing their operability in detecting and proving infringements. A fresh amendment on Turkish Competition Act clarifies Turkish Competition Authority’s (TCA) powers associated with down-raid regarding digital documents. In this brief article, we authored TCA’s recent Burdur LPG Case, TCA imposed fine on LPG retailers of the city of Burdur, based on the evidence extracted from WhatsApp communication between executives of the undertakings.

The investigation was initiated on the claims that the undertakings has been increasing LPG and fuel oil prices jointly. The relevant product market was defined as “retail sale of Autogas LPG” and “retail sale of white fuel products used in the automotive industry” and the relevant geographical market as “center of Burdur province”. During dawn raids, a WhatsApp group named “Püis Burdur”, formed by the executives of undertakings under investigation, was detected. It is understood from some statements in the conversations that group members are aware that the communication between them is against the competition law and EMRA regulations. In the reasoned decision, TCA highlighted the principle of circumstantial evidence and its use in competition law violations, in particular for “hardcore violations” that are confidentially engaged in.

Regarding the legality of mobile phone search and WhatsApp evidence, the reasoned decision provided following assessments:

• According to Article 15 of the Act no 4054, the inspectors have the power of examining the books, any paperwork and documents of undertakings and associations of undertakings. Under this rule, TCA assumed that the inspectors have the power to examine the mobile phones and computers belonging to the company.
• European Commission regulations clearly give the power of examining the mobile devices, cloud storages and also personal mobile devices if the undertaking applies “Bring Your Own Device-BYOD Policy”.

Accordingly, TCA assumed to have investigative powers on WhatsApp correspondence on company mobile phones and any such finding was assumed to have evidential value. In assessing WhatsApp correspondence, the Authority determined that the existence of any employee of an undertaking in a WhatsApp group of undertakings under investigation, demonstrate the involvement of that particular undertaking in the violation. Moreover, any WhatsApp group member is deemed to be a part of violation even though that particular member has been silent in the group. The Authority is of the view that any such member may not determine its prices independently after reading WhatsApp messages regarding prices.

Based on WhatsApp conversations that demonstrates price coordination and price analysis, TCA finally determined that 10 undertakings in the city of Burdur violated the Article 4 of the Act no 4054 by increasing the Autogas LPG and fuel oil prices as a cartel and imposed an administrative fine.

Burdur LPG case is the first case so far, resulting in cartel decision based on WhatsApp findings. However, TCA has been taken WhatsApp correspondence into account officially in several cases since 2017 as follows:

• The first case in which TCA was confronted with WhatsApp communication is the Orthodontics decision, where TCA conducted a cartel investigation against suppliers of orthodontics materials and equipment for price-fixing. The Authority did not find any violation of antitrust rules, but officially referred to WhatsApp conversations in the reasoned decision. As per the decision, the WhatsApp accounts in question was belonging to corporate lines, not private line of the individuals and the inspectors reached out these communications via web-based application.
• In the Frito Lay decision, where TCA conducted a preliminary investigation for abuse of market dominance claims, the Authority took into consideration the WhatsApp conversations provided by the complainant. The Authority did not find any violation but the presence of WhatsApp content in the reasoned decision indicated the Authority legally valued this content as evidence.
• In the MOSAS decision, the WhatsApp dialogues of employees about the undergoing dawn raid with the content such as; “disconnecting the internet”, “disrupting the modem”, “deleting the emails”, was accepted as evidence of hindering or complicating the down raid. Thereupon, screenshots of the correspondences were taken by the inspectors.
• In the Cig Kofte decision, TCA took into account the document provided by the complainant, which disclosed the existence of a WhatsApp group through which competitors get into contact and exchange information regarding the market.
• Another decision where TCA valued WhatsApp content, is the Mey-Efes merger decision, which is an interesting hostile takeover attempt occurred between two giant producers of alcoholic beverages in Turkey. “Tekel Birası” is the brand under the possession of Mey and was being subject to be taken over by Efes. As understood from the decision, Mey did not show consent for this acquisition and declared that Efes submitted a merger file based on misleading information regarding their consent. On the other hand, Efes tried to demonstrate Mey’s consent by handing over WhatsApp conversations between the executives of two companies. In the end, TCA found that the merger is not subject to notification but acknowledged WhatsApp correspondence as evidence demonstrating Mey’s consent and accordingly did not fined Efes for misleading information.

As part of similar approach, the Dutch antitrust watchdog ACM, imposed a fine of 1.84 million Euros in a recent case, to a company under antitrust investigation in 2019, for obstructing a dawn raid by deleting WhatsApp conversations. The ACM’s dawn raid rules are similar to that of TCA where ACM is authorized to perform unannounced dawn raids during investigations and all companies under investigations are required to cooperate. If any employee destroys or damages any evidence, the company will be faced with administrative fines. In this particular case, the inspectors explained the dawn raid procedure and started to inspect all physical and electronic documents including corporate phones. During the dawn raid, one of the two employees of the company who was requested to hand over the corporate phone, left several WhatsApp groups before handing it over to the ACM inspector. Afterwards ACM inspector informed the company manager to cooperate with the ACM investigations and not to destroy mobile content. Despite this warning some more employees left the internal WhatsApp groups during the dawn raid and also deleted conversations that could contain evidence related to the alleged violations. After this last act of the employees, the company instructed the employees not to touch the app messages, delete conversations or leave the WhatsApp groups. The Dutch Authority has imposed a fine for breaching of the duty of cooperation under the article 5:20, first paragraph of the Dutch General Administrative Law Act. certain facts such as warning of company manager and providing an overview of the deleted/abandoned WhatsApp groups/chats considered for fine reduction. Eventually, the ACM imposed a significant fine as 1.84 million Euros for deleting WhatsApp conversations even though implemented a fine reduction.

Several other cases where WhatsApp messages are taken into consideration in antitrust cases are such:

• The Spanish Competition Authority (the Spanish Markets and Competition Commission / “CNMC”) acknowledged WhatsApp correspondence as evidence for the violation market partitioning in the 2013 Almendra y Miel case. The Spanish Supreme Court (Audiencia Nacional) also approved the decision.
• The Spanish Competition Authority took into consideration the WhatsApp conversations in the 2016 Cementos case.
• The Chinese Competition Authority (China’s National Development and Reform Commission /”NDRC”) based its violation claims on Wechat conversations, at the vehicle inspection cartel case.
• In the 2017 wristband cartel case against Zaappaaz, Promotions, Wrist-Band, Customlanyard, the Antitrust Division of US Department of Justice (“DOJ”) based its violation claims on the conversations found on social media platforms and encrypted messaging applications, such as Facebook, Skype and WhatsApp and determined that the companies reached and implemented their illegal agreements through these communication channels.

All these cases demonstrate that WhatsApp findings have been legally considered as evidence, very similar to traditional email findings. In the Spanish case in particular, the Supreme Court approval has reinforced this situation. Reviewing these decisions is significant for holding a view on antitrust authorities’ approaches around the world regarding evidences obtained from digital communication evidences such as WhatsApp conversations, and is enlightening in understanding how digital transformation affects the competition law enforcement.

By Metin Pektas, Antitrust and Compliance Partner, and Deniz Kivanc, Associate, Nazali Tax & Legal

Turkish lawyers Semih Metin and Seval Cicek have founded the MC Legal law firm in Istanbul.

According to MC Legal, Metin “has a wide range of knowledge and experience in various fields such as domestic and international initial public offerings, local and foreign issuances of bonds and other securities, regulations governing publicly traded companies, brokerage houses and other capital market institutions, share and property merger and acquisition projects and conducting due diligences, preparation of all kinds of corporate legal documentation, corporate, and commercial law and establishment of compliance programs on local and international anti-bribery and corruption regulations.”

Metin spent 14 years with Turkey’s Capital Markets Board, the better part of four years with DLA Piper in Istanbul, a year and half as a Partner at Nazali Tax and Legal Services, and over a year as Head of Legal at Hurriyet Gazetecilik ve Matbaacilik A.S. He graduated from the Ankara University Faculty of Law in 1997 and obtained an LL.M. from the Duke University School of Law in the United States in 1998.

Cicek, who specializes in employment law, litigation, and alternative dispute resolution, spent a year as a Senior Attorney at Nazali Tax & Legal Services, then the past ten months at SC Legal Services, which she founded in October 2019. She also spent six years as an auditor in Turkey’s Social Security Institution. She graduated from the Marmara University Faculty of Law in 2017. 

According to Semih Metin, “we define MC Legal as a boutique law firm which offers corporate & commercial, capital markets, mergers & acquisitions, employment and social security law services for our clients. Although we are capable of handling specific projects on the relevant legal areas, we will have a strong focus on providing retainer legal services, which is highly needed by Turkish companies.”

Kinstellar has advised Vivense and its CEO and founder, Kemal Erol, on a USD 130 million investment into the company by the Actera Group, a private equity firm focusing on investments in Turkey.

According to Kinstellar, “the new investment from Actera will, under the leadership of Kemal Erol, form the launchpad for the global expansion of Vivense’s online furniture business. The company plans to launch UK operations with a London showroom later this year, and its international e-commerce platform at the beginning of 2021.”

Kinstellar’s team was led by Partner Baran Gen and included Senior Associate Mert Elcin, and Associates Irmak Seymen and Beliz Zorlu.

Kinstellar did not reply to our inquiry on the matter.

Editor’s note: After this article was published, the Esin Attorney Partnership informed CEE Legal Matters that it had advised Earlybird Venture Capital on its exit from Vivense. The firm’s team was led by Partner Eren Kursun and include Senior Associate Orcun Solak and Associate Sila Pinar.

Aksan has advised Paket Mutfak Gayrimenkul Isletmeciligi ve Hizmetleri Anonim Sirketi and its shareholders on its latest investment round.

According to Aksan, “Paket Muftak is the first and unique domestic startup that provides restaurant owners to open a new takeaway branch without spending any capital.”

Aksan’s team included Partner Melih Aksan and Associate Merve Kutukcuoglu.

Aksan did not reply to our inquiry.