Update: New procedures for convening general assembly meetings of joint stock companies

Posted in Corporate, M&A and securities

Article 489 of the Turkish Commercial Code numbered 6102 (TCC) regulating the transfer of bearer share certificates was amended on December 31, 2020. According to this amendment, which entered into force on April 1, 2021, the transfer of bearer share certificates is only effective for the company as well as third parties if the transfer is notified to the Central Securities Depository (Merkezi Kayıt Kuruluşu) by the transferee. The amendment’s main goal is to make bearer share certificate shareholding information more transparent.

Simply transferring possession of the certificates, which was previously one of the steps of the transfer procedure, is no longer sufficient. The bearer share certificate holders are no longer be able to exercise their shareholding rights under the TCC prior to notification of the transfer to the Central Securities Depository. In this regard, the Central Securities Depository has launched the Bearer Share Registration System (Hamiline Pay Kayıt Sistemi) for the registration as well as tracking of the bearer shares.

According to Temporary Article 14 of the TCC, in order to request the notification of ownership of bearer share certificates to the Central Securities Depository, certificate holders must apply to the company together with the certificates by December 31, 2021. Within five days of such application, the company shall notify the Central Securities Depository of the information concerning the bearer share certificates and the shareholders. Shareholders will not be able to exercise their shareholding rights until such time as they make an application for registration. Additionally, shareholders failing to apply for registration of bearer shares as well as companies failing to register shareholder applications with the Central Securities Depository shall be subject to an administrative fine.  

In line with this notification requirement, the Regulation on the Procedures and Principles Regarding the General Assembly Meetings of Joint Stock Companies and the Ministry Representatives Attending Such Meetings (Regulation) was amended by a regulation published in the Official Gazette dated May 29, 2021 and numbered 31495.

According to the amended Regulation:  

  • for the preparation of the list of attendees, a shareholder chart (Pay Sahipleri Çizelgesi) listing the bearer share certificate holders shall be obtained from the Central Securities Depository;
  • in addition to the list of attendees, the shareholder chart shall also be made available for review at the meeting venue;
  • bearer share certificate holders may only attend the general assembly meeting if:
    • their names or trade names are included in the shareholder chart; and
    • they are able to evidence possession of the bearer share certificates to the board of directors prior to signing of the list of attendees; and
  • shareholders holding a bearer share certificate who have applied to the company to request notification to the Central Securities Depository shall be included in the list of attendees of the general assembly meetings to be held until December 31, 2021, even if the necessary notification has not been made to the Central Securities Depository by the company. Such shareholders shall sign the list of attendees by submitting their ID card (if a real person) or their ID card and authorization document (if a representative of a legal person).

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