In General
The right to postpone the discussion of the financial statements is granted to minority shareholders and appears in article 420 of the Turkish Commercial Code No. 6102 (the “Law”) as a right that can be exercised at the general assembly meeting. Accordingly, the discussion of the financial statements at the general assembly meeting and related issues will be postponed to one month later by the decision of the chairman of the meeting, upon the request of the shareholders who own one-tenth of the capital in non-public companies and one-twentieth of the capital in public companies, without the need for the general assembly to take a decision.
The main purpose of the article is to provide minority shareholders who cannot fully or adequately examine the financial statements before the general assembly with the opportunity to examine the financial statements in more detail and vote more consciously on the financial statements and other related issues in the general assembly. Minority shareholders thus gain one more month to review the financial statements.
How Will the Right of Postponement Be Exercised?
The right of postponement can only be exercised by the minority shareholder during the general assembly meeting. It is not possible to exercise this right with a declaration to be made to the board of directors before the general assembly. If the minority shareholders do not make such a request, the chairman of the meeting cannot decide to postpone the discussion of the financial statements and the related agenda items. Therefore, the right in question can only be exercised in the general assembly upon request.
There is no need for any justification by the minority shareholder to exercise the right of postponement. On the other hand, in order to postpone the discussion of the financial statements and the discussion of the related agenda items once more at the second meeting to be held one month later, it is recommended that the objections to the financial statements be recorded in the minutes, since the relevant parties must not have responded to the objected points of the financial statements in accordance with the principles of honest accountability.
It is not obligatory to record the request for the exercise of the right of postponement in the minutes of the meeting, but it is recommended to record the request in the minutes to exercise the right for the second time and for a possible annulment lawsuit, as well as for proof.
In order to postpone the discussion of the financial statements and related issues, it is sufficient for the minority shareholder to make a request, and there is no need for the general assembly to take a decision or for the approval of the chairman of the meeting. Upon request, the chairman of the meeting must postpone the discussion of the relevant agenda items.
What is the Scope of the Right?
The scope of the right of postponement includes the discussion of the financial statements and the related issues on the agenda. Here, the most important problem is the determination of the related agenda items.
Although there are discussions, it is mainly accepted that if there is a discussion of the profit-loss account, which is an integral part of the financial statements, the distribution of dividends, the release of the members of the board of directors, and the election of the same persons whose terms of office have expired as members of the board of directors and auditors, this should also be postponed. The election of new members to the board of directors, and of and new auditors and the permissions of the board members to do business and compete with the company to be granted in accordance with Articles 395-396 of the Law may be discussed and decided.
What are the Consequences of Exercising the Right?
With the exercise of the right, the discussion of the financial statements and the related agenda items will be postponed for one month. The one-month period regulated here is the minimum and a longer postponement can be made. On the other hand, a shorter postponement cannot be made without the approval of the minority shareholders.
The postponement is notified to the shareholders by announcement in the Turkish Trade Registry Gazette and if the company is obliged to establish a website, it is published on the website. For the following meeting, the general assembly is called for a meeting in accordance with the procedure stipulated in the law. The following meeting is a continuation of the first meeting.
In the second meeting, only the approval of the financial statements and the related agenda items can be discussed, the agenda cannot be changed.
Minority shareholders have the right to request the postponement of the financial statements and the related agenda items once again, but in order to exercise this right, the relevant parties must not have responded to the objected points of the financial statements in accordance with the principles of honest accountability.
What are the Consequences of Preventing the Exercise of the Right?
If the discussion of the financial statements and the related agenda items is conmtinued despite the minority shareholders’ exercise of their right to postpone, a lawsuit for annulment may be filed in terms of the financial statements and the related agenda items.
In order to file an annulment lawsuit, the minority shareholder must have his dissenting opinion recorded in the minutes, and the lawsuit must be filed against the company in the commercial court of first instance where the company headquarters is located within three months from the date of the decision.
Although the request for postponement of the discussion of the financial statements is made, if the financial statements and the related agenda items are discussed and an application for registration is made, this request must be rejected by the registrar’s office, but the registrar will register and announce other general assembly resolutions.
