a)
Attendance to general assembly
(i) Principle
A shareholder may attend to the general assembly to exercise his or her shareholding rights. Furthermore, the shareholder may be represented at the general assembly by a person who may or may not be a shareholder. The provision that requires representatives to be a shareholder is not valid.
Shareholding rights, registered shares and certifications are exercised by persons who have been authorized in written form. A person proving the possession of bearer shares is authorized to exercise shareholding rights.
(ii) Representation of shareholders
General
A person exercising the attendance rights (representative) must comply with the instructions. Noncompliance with instructions does not make the vote invalid. The principal's rights against the representative are reserved.
A person who has bearer share as a result of pledge, custody contract etc may exercise the shareholding rights only if this person has been authorized with a special written document.
Institutional representative
Institutional representation is a shareholders initiative. This role cannot be executed as a profession or for a consideration. This position should be considered as an initiative to coordinate opposition which will result in improved shareholders democracy in the general assembly.
The institutional representative demands representation authority with a memorandum. This memorandum is a plan with respect to the management and audit of the joint stock company and corporate governance principles. This plan may also consist of financing, investment, profit distribution etc. The institutional representative must comply with the instructions as stated in this memorandum. The representative cannot act in contrary to the policies and principles in the memorandum including voting in the general assembly.
Before at least 45 days as of the date of the announcement of the general assembly meeting call published at the Trade Registration Gazette, the board of directors serves notice to all shareholders to inform the company of the proposed institutional representative's identity, addresses, electronic mail and telephone and fax number within 7 days at the latest. In the same notice, person(s) who wish to be institutional representatives are requested to apply to the company. The board of directors announces and publishes on the web site the identity, address and the contact information of the institutional representatives through the meeting call. The representation authority cannot be taken without complying with the rules as stated in this provision.
Depositor representation
Shareholders may deposit shares to representatives such as fund managers and custodians etc. Such representatives who have the right of attendance and shareholding rights on behalf of the shareholders must apply to the shareholders prior to the general assembly meeting in order to obtain the instructions. If the instructions are not obtained in a timely manner, the representative uses the general instructions provided by the depositing shareholders. In the absence of general instructions, voting is used in accordance with the recommendations of the board of directors.
The policies and procedures as well as the content of representation document with respect to the representation within the context of this provision are determined by the Ministry of Customs and Trade.
Other related provisions
Institutional representatives should declare the content of the representation document and the information relating to whether they will vote positively or negatively through television, radio, newspaper or other means together with their rationales.
Furthermore, representatives (institutional and depositor representatives) should inform the company of the number of shares being represented, types, nominal values and groups. The meeting chairman should declare this information at the meeting; otherwise each shareholder may apply to the court to cancel this resolution.
b) Attendance without authority
It is not valid to transfer shares or to give shares to others for the purpose of eliminating restrictions with regards to exercising voting rights or making them ineffective. Each shareholder may make an objection to the meeting chairman and the board of directors for attendance without authority and have this objection noted in the meeting minutes.
c) Voting rights
(i) General
- Shareholders exercise their voting rights proportionate to the nominal value of their shares.
- Each shareholder has at least one vote right even if he or she only owns one share. In addition, the number of votes granted to a shareholder who has more than one share may be restricted in the articles of association.
- Voting rights occur with the payment of the least amount of a share determined by law or articles of association.
- The Ministry of Customs and Trade will issue a communiqué for public companies with regard to policies and procedures related to cumulative voting.
(ii) Prohibition on exercising shareholding rights
A shareholder and the related parties as defined by law cannot vote on resolutions with respect to personal matters or transactions.
The Board members as well as persons who have signing authority in the management cannot exercise the shareholding rights on resolutions related to the release of board members.
d) Right to information and inspect
- Stand-alone and consolidated financial statements, annual report of the board of directors, audit reports and the dividend distribution proposal of the board of directors are made available to shareholders at the company's headquarters and branches 15 days before the general meeting takes place. The financial statements are kept for 1 year at the company's headquarters and branches in order that shareholders may access the related information. Each shareholder may request a copy of the financial statements.
- The shareholder may request information from the board of directors regarding the company's business; from the auditors regarding the method of the audit. The obligation of providing information is applicable for group companies. The information should be provided based on transparency and accountability principles. If one of the shareholders obtains information outside of the general meeting, upon request of another shareholder at the general meeting, the information with the same scope and details must also be provided to that shareholder although this matter is not included in the meeting agenda.
- Information request may be rejected on the grounds that the requested information is the company's confidential information or the company's interests may be in danger in the event that such information is provided.
- Obtaining information as to the company's commercial books and related correspondence and inspecting the parts that relate to the shareholder's question require the permission of the general assembly or the board of directors' resolution on this matter. In the case of granting the permission, the inspection is conducted with a specialist.
- If the request to access information is unanswered, rejected with no valid reason or deferred, the shareholder may apply to the commercial court of the first instance at the location of the headquarters. The court may rule that the information can be provided outside the general meeting and how this information will be provided. The court order is final.
- Right to obtain information and inspect cannot be removed or limited with articles of association or with a decision of one of the company's body.
e) Right to request special audit
(i) Decision of general assembly regarding request for special audit
- Each shareholder may request a special audit at the general meeting to clarify certain issues if deemed necessary and rights to obtain information and inspect were exercised previously. The request can be executed even though this matter has not been included in the meeting agenda. If this request is accepted by the general assembly, the company or each shareholder may request within 30 days from the commercial court of the first instance, at the location of the headquarters, the appointment of a special auditor.
- If the request is rejected at the general assembly, shareholders having at least 10% of the capital in unquoted companies and 5% in quoted companies or shareholders holding shares of an aggregate nominal value of at least TL 1 million, may request within 3 months from the commercial court of the first instance at the location of the headquarters, the appointment of a special auditor. If the shareholders requesting special audit can prove that the company has experienced losses as a result of mismanagement by breaching law and articles of association, the special auditor must be appointed.
(ii) Appointment of special auditor
- The court makes an order after hearing the company and the shareholders requesting a special audit.
- The decision of the court on any such application is final. If the court sees fit, one or more than one independent specialist may be appointed to determine the matters to be inspected within the framework of the request.
(iii) Duties
The special audit must be conducted in a timely manner without interrupting the company's business unnecessarily.
The board of directors must allow the special auditor to access the company's books and all related correspondence and all assets particularly cash vault, securities and inventories.
Founders, bodies, employees, administrator and liquidation officer are liable to provide information to the special auditor on important issues. In case of dispute between the parties, the court makes an order. The decision of the court on any such application is final.
The special auditor is liable not to disclose the company's confidential information
(iv) Special audit report
The special auditor presents a detailed report with respect to the outcome of the audit to the court whilst protecting the company's secrets.
If the company applies to the court for an order directing that the announcement of the report has disclosed the secrets of the company and may result in losses, the report should not be presented to the shareholders requesting the special audit.
The court may allow the company and shareholders requesting special audit to announce their evaluations and ask additional questions of the report.
(v) Presentation of special audit report to the general assembly
The board of directors presents the report as well as related evaluations to the general assembly in the first meeting. Each shareholder may request a copy of the special audit report and the related opinion of the board of directors within one year following the general assembly meeting.
(vi) Costs of special audit fees
In the case where the general assembly adopts a resolution to appoint a special auditor, the company bears the costs. If the court orders to appoint a special auditor, costs are determined by the court. Costs may be borne by the shareholders requesting the special auditor in certain situations.
