Turkish Commercial Code Regulations on Share Repurchases and Shareholder Appraisal Rights

The Turkish Commercial Code (TCC) provides regulations for various aspects of share repurchases and shareholder appraisal rights. This article outlines key points regarding restrictions on share repurchases, shareholder appraisal rights, and general assembly authorisation.

Restrictions on Share Repurchases

Prohibition on Transferability Restrictions

• The Capital Markets Board prohibits restrictions on the transferability of shares of a public company.
• Listed companies can repurchase their own shares without a general assembly authorisation if it’s necessary to avoid a probable and serious loss (daily average price below nominal value or fallen by more than 20%).

Maximum Duration of Repurchase Programmes

• The maximum duration of the repurchase programme is three years for listed companies and one year for other publicly held companies.

Shareholder Appraisal Rights

Eligibility Cases

• Shareholders have appraisal rights in cases of mergers, changes in company type, and significant transactions.
• If shareholders disagree with these actions, they can sell their shares to the company at a fair value.

Significant Transactions Limitations

• The Communiqué on Common Principles of Significant Transactions and Retirement Rights determines the extent of significant transactions and limits voting rights and retirement rights.

General Assembly Authorisation

Publicly Held Companies

• A general assembly authorisation is required for share repurchases in publicly held companies, except in cases where listed companies need to avoid a probable and serious loss.
• The board of directors must be authorised by a general assembly for a share buy-back system.