Contact: Att. Nilay Celebi; Erdem & Erdem (Turkey)
Capital Markets Law No. 6362, the Communiqué on Corporate Governance Principles II-17.1 ("Communiqué") and the relevant regulations issued by the Capital Markets Board ("CMB"), regulate related party transactions of public companies. There are certain principles set forth in the capital markets legislation that establish how to conduct a related party transaction. Disclosures to the public should be made via the Public Disclosure Platform (KAP) for entering into such a transaction.
Related party transactions are defined under the Turkish Accounting Standards and spouses, company controlled directly or indirectly, parent / holding company, subsidiary, associates of the holding company, key directors are considered as related parties.
Capital Markets Law No. 6362
A general rule for executing a related party transaction is determined under Art. 17/3 of the Capital Markets Law No. 6362. As per said provision, prior to the related party transaction, the principles of which shall be determined by the CMB (see below explanations under the Communiqué), public companies should adopt a board of directors' decision, which determines the principles of the transaction to be conducted. The approval of the majority of independent members is required for the implementation of the relevant board of directors' decisions. If a majority of the independent members disapprove the transaction in question, it must be disclosed to the public on the Public Disclosure Platform (KAP) and the transaction must be submitted to the general assembly for approval. In such a case, no meeting quorum is required and the parties of the transaction and related parties cannot vote in the general assembly. The resolutions are taken by a simple majority vote. The resolutions of the board of directors and general assembly not adopted in accordance with the aforesaid principles shall be deemed void.
