Category: Turkiye

The government announced a substantial change in bearer shares at the end of 2020, but the details were only finalised in April 2021. According to the new amendment, non-public joint stock companies are now obliged to register shareholders holding bearer shares.

Information about these shareholders (e.g. name, identity number, address, number of shares, etc.) will be registered through the system of the central registration authority either by the company representatives or the shareholders themselves. Unless stated otherwise, such shareholders will no longer be able to exercise their rights under the law. Registration must be completed by 31 December 2021.

With the new amendments, it is fair to say that the anonymity of shareholders holding bearer shares in non-public joint stock companies has been obliterated. The shareholder’s identity will be registered in the system. In other words, transfers of such bearer shares will be monitored and recorded. Remarkably, the method of transferring bearer shares and registered shares, which is one of the most fundamental differences between them, has practically converged.

How did it work before?

The owner of the bearer shares was someone who had them in their possession and could transfer them simply by delivering possession to the transferee without registering the transfer in the share ledger.

Why the fundamental change?

The preamble to the law explains that bearer shareholders and their holdings will be monitored to reduce the risk of money laundering and financing of terrorism.

By Didem Kara, Attorney at Law, Schoenherr

BTS & Partners has advised freight tech startup Yolda on a USD 1.9 million seed round led by Speedinvest, Collective Spark, and prior angel investors including Marcus Mosen, Stefan Kalteis, and Florian Gschwandtner.

According to BTS & Partners, Yolda manages logistics operations for B2B clients: shipping requests, tracking, and logistics operational performance can be managed on their platform. With more than 400 clients, Yolda plans to expand its operations into Europe, double the team size, and increase operational efficiency through new technologies.

Last year, BTS & Partners advised Yolda on investment from Collective Spark (as reported by CEE Legal Matters on June 2, 2020).

BTS & Partners’ team included Partner Okan Arican, Associate Burcu Cinar, and Legal Intern Orhan Deniz Toprak. The firm did not reply to our inquiry on the matter.

Paksoy has advised Kibar Holding on the sale of Assan Gida Sanayi ve Ticaret to Kraft Heinz Company. Esin Attorney Partnership advised Heinz on the deal.

The deal is expected to close by the second half of 2021, pending closing and regulatory approvals.

Kibar Holding, an industrial conglomerate in Turkey, is the sole owner of ketchup, mayonnaise, sauce, and tomato paste producer Assan Gida Sanayi ve Ticaret A.S.

Paksoy’s team included Partner Elvan Aziz, Senior Associate Hazal Korkmaz, and Associate Bengusu Guvendi.

Esin’s team included Partner Duygu Turgut and Senior Associate Orcun Solak.

Former Managing Associate Ozgur Guner has been promoted to Partner at Moral & Partners.

Guner, who’s been with the firm since 2007, has been the Head of the Employment department since 2017 (as reported by CEE Legal Matters on January 13, 2017). He focuses on employment law, litigation, and alternative dispute resolution.

The firm congratulated Guner on his appointment, stating “We believe [his] presence at the firm as a Partner at the Employment Department is our strength.”

Guner graduated from the Dokuz Eylul University School of Law in 2007 and completed his Master’s Degree in Economic Law at the same university in 2009.

BTS & Partners has advised Veloxia Technology on a USD 3 million financing round led by Collective Spark.

Veloxia Technology is an Istanbul-based mobile game developer. The investment will help the company accelerate development of games in the strategy and action categories.

Collective Spark is a Turkish venture capital fund that invests in early-stage technology ventures.

BTS & Partners did not reply to our inquiry about the deal.

GKC Partners and White & Case have advised Zorlu Yenilenebilir Enerji A.S. on its USD 300 million issuance of 9.00% senior secured notes due 2026. Paksoy advised global coordinator BofA Securities on the issuance.

Zorlu Renewables is an independent Turkey-based renewable energy producer. 

GKC Partners’ team included Partners Derin Altan and Ates Turnaoglu, Associates Eren Ayanlar, Aybike Iplikci, Caglar Senol, and Gozde Berkil, and Legal Interns Zeynep Ulasan and Sehriban Unlu.

Paksoy’s team included Partners Omer Collak and Sera Somay, Senior Associates Nazli Tonuk Capan and Beril Paksoy, and Associates Sabri Kaya, Elvan Yolcu, and Ege Serra Onal.

Clifford Chance and Ciftci Attorney Partnership have advised Arcelik A.S. on its offering of EUR 350 million in 3.0% Green Bonds due 2026 on the Euronext Dublin Stock Exchange. Gedik & Eraksoy and Allen & Overy advised joint lead managers JP Morgan Securities plc, Merrill Lynch International, and MUFG Securities EMEA plc.

Arcelik is a producer of home appliances with manufacturing facilities in Turkey, Romania, Russia, China, South Africa, Thailand, and Pakistan. The company employs around 30,000 people and provides goods and services in 145 countries.

According to Clifford Chance, Arcelik aims to use the capital raised “to finance its Eligible Green Projects, including its energy-efficient, eco-efficient, and circular economy adapted products and the promotion of energy efficiency in production. In addition, the proceeds will fund the company’s sustainable water and wastewater management, pollution prevention control, renewable energy, and green buildings initiatives.”

The Clifford Chance team included London-based Partner Matt Fairclough, Senior Associate Jeffery Hung, and Associate Farah Rohaizat. Ciftci Attorney Partnership’s team consisted of Partner Sait Eryilmaz and Associates Basar Kırka and Alican Altiparmak.

The A&O team included Partners Jonathan Melton and Sachin Dave, Counsel Stephanie Dee, Senior Associate Andrew Enga, and Associate Shantanu Dey. Gedik & Eraksoy’s team was led by Partner Umut Gurgey, assisted by Senior Associate Dilsah Gurses, and Associate Burak Ozsoy.

Merve Oney Barlas has joined Istanbul-based financial services provider DgPays as Chief Legal Officer.

Barlas was an Associate Lawyer with Dentons legacy firm Salans between 2008 and 2012. Later, she held the same position with Herguner Bilgen Ozeke for over two years before moving in-house as the Director of Legal Affairs and Secretary of the Board of Directors of Mapfre Genel Sigorta.

Originally reported by CEE In-House Matters.

The Pelister Atayilmaz Enkur Law Office has advised Montana Tec Components on the acquisition of the remaining 20% stake in Turkish flexible packaging manufacturer Arimpeks.

The acquisition was carried out through Montana Tec Components’ subsidiary, Aluflexpack AG. PAE previously advised Montana Tec Components on the acquisition of an 80% stake in Arimpeks in 2018 (as reported by CEE Legal Matters on October 3, 2018). 

Montana Tec Components is a Switzerland-based developer of energy storage solutions, aerospace components, metal tech, and industrial components.

PAE’s team included Partners Gokhan Enkur and Emre Atayilmaz and Associate Yafes Oner.

Capital commitment is one of the indispensable conditions for becoming a shareholder in a Turkish joint-stock company (“JSC”). Under Turkish law, the main responsibility of a shareholder, whether in the stage of incorporation or capital increase, is to pay the undertaken capital.

Turkish Commercial Code No. 6102 (“TCC”) stipulates that shareholders must fulfil 25 % of their commitment in cash before or at the time the incorporation or capital increase is registered in the relevant Trade Registry, while the remaining amount must be paid within 24 months after the registration date. If a shareholder fails to fulfil their commitment obligation within these periods, the board of directors (“BoD”) of the JSC is obliged to request capital payment from the defaulting shareholder.

Forfeiture procedure against a defaulting shareholder

If a shareholder defaults on the payment of their capital contribution, the BoD may commence an enforcement proceeding against them or forfeit their shares. Actions taken during the forfeiture procedure are explicitly regulated under Article 483 of the TCC.

To initiate the forfeiture procedure:

• the shareholder must default on the payment of their contribution to the registered capital of the JSC;

• the BoD must serve notice through a notary public in which the following points must be indicated: (i) net amount of the debt and accrued interest; (ii) peremptory period (i.e. 1 month)  to fulfil the said obligation.

Despite the served notice, if the payment is not made within the peremptory period stated therein, the BoD is required resolve on forfeiture of the relevant shares.

Consequences of the forfeiture procedure

The main consequence of the forfeiture procedure is the loss of rights to the shares that the defaulting shareholder failed to pay for. The defaulting shareholder will in any case be entitled to exercise the rights arising out of company shares other than the shares in question. If the shares in question are the only shares held by the defaulting shareholder, then the shareholder will be removed from the share ledger of the JSC and loses all shareholding rights in the JSC. Partial payment does not relieve the shareholder from the forfeiture procedure and has no effect on the forfeiture procedure over the entirety of the relevant shares. In addition, the shareholder will not be entitled to claim the return of their partial payment from the JSC and that amount will be recorded as a legal reserve.

Following the forfeiture procedure, the ownership of the shares in question will temporarily return to the JSC itself and the BoD will only be entitled to sell those shares to third parties (including the other shareholders) by protecting the interests of the JSC at the highest level.

Conclusion

The forfeiture procedure under Turkish law has serious legal and financial impacts on the shareholders of a JSC, including loss of shareholder rights. This system is regulated under the TCC to alleviate damages in JSCs where capital commitments cannot be collected from shareholders. The forfeiture procedure introduces an important sanctions mechanism that may be initiated against the defaulting shareholders of a JSC.

By Didem Kara, Attorney at Law, Schoenherr