Chambers of commerce and industry affiliated with the Union of Chambers and Commodity of Exchanges of Turkey ("TOBB") announced through their official websites that a notification dated 31.03.2020 was sent by the Ministry of Commerce to TOBB and that this notification emphasized the importance of protecting the equity of companies during Covid-19 pandemic.
Furthermore, this notification requests that dividend distribution agenda must include discussion of the below matters in the general assembly meetings of companies, except for the state-owned companies, pertaining to the fiscal year 2019 to be held this year as per the Article 13 paragraph 5 of the “Regulation on the Procedures and Principles of General Assembly Meetings of Joint Stock Companies and the Representatives of the Ministry of Customs and Trade Present in Such Meetings” (“Regulation”) published in the Official Gazette dated 28.11.2012 and numbered 28481. Accordingly, the shareholders must consider;
i. not to distribute previous years’ profit,
ii. not to distribute dividend in an amount more than 25% of net profit pertaining to 2019, and
iii. not to authorize board of directors to make advance dividend payments.
Article 13, Paragraph 5 of the Regulation stipulates that “It is mandatory to include the general assembly meeting agenda items that are requested by the Ministry (Ministry of Commerce) as a result of an audit or for any reason”. Accordingly, the matters specified in the notification sent by the Ministry of Commerce to companies through TOBB, must be added to the dividend distribution agenda and a resolution must be adopted by the shareholders participating in the general assembly by taking these matters into account. On the other hand, we are in the opinion that the notification does not constitute a requirement for the shareholders at the general assembly meeting, to adopt a resolution pursuant to the directive of Ministry of Trade of the and the shareholders may decide otherwise provided that the conditions required by the Turkish Commercial Code numbered 6102 and other relevant legislation are met.
Kind regards,
Özay Law Firm