Related Party Transactions in Joint Stock Companies
Dr. Bahar Şimşek
Special regulations regarding related party transactions aim to prevent transfer of the corporate assets to related parties, and thus, prevent exploitation of all the stakeholders of the company by the controlling shareholder(s) and manager(s). For this purpose, a comprehensive regulation has been introduced in the Capital Markets Law regarding related party transactions and a procedure has been envisaged for certain significant transactions. Since the relavant rules are outlined in the Capital Markets Law, this blog post mainly discusses this regulation. But, the post does not only examine public companies; it also covers non-listed companies. Moreover, the post deals with relevant regulations in the Turkish Commercial Code and other laws, which can be considered as related party transactions.
The thesis the post is based on consists of four parts. In the first part, the concept of related party transactions is explained and the reasons for the need for regulating related party transactions are revealed. In this context, related party transactions are compared with similar concepts and the regulations in the European Union and various countries are examined. Finally, the historical developmentof related party transactions in Turkish law is examined. In the second chapter, the concepts of related party and related party transactions, as defined in legal regulations, are discussed. In the third section, the regulations contained in the Capital Markets Law, the Turkish Commercial Code and other specific legal rules related to related party transactions are examined, and the procedural protections provided for related party transactions are explained. In the fourth chapter, the results of unlawful related party transactions and the liability of the related parties are examined.
For the full text of this blog post in Turkish, please click here.
Key words: Related parties, Related party transactions, joint stock companies.