e-book2011

COMPETITION LAW

153

Competition Authority Sanctioned Zeeijang Longhseng Group

Co Ltd to an Administrative Fine due to Realization of an

Acquisition without Obtaining the Necessary Authorization

Att. Begüm Taner Huntürk

The authorization for an acquisition is demanded through a notification

registered on 17 May 2011 to the Authority’s records for transfer of

the 62,4 % of the capital of Kiri Holding Singapore Private Limited

(“Kiri Singapore”), and thus the transfer of Dystar Colours Distribution

Gmbh’s (“Dystar”) control to the Zhejiang Longsheng Group Co. Ltd

(“Longsheng”).

Longsheng wants to enlarge his business with penetrating into the

dye market and by having operations in the areas where it has no or very

limited activity by converting a convertible bond, purchased in January

2010, into the shares in order to be a shareholder of Kiri Singapore.

Kiri Dyes & Chemicals Ltd. (“Kiri India”) agreed to acquire the

assets that constitute Dystar from the German liquidation authority

through the agency of the holding company that is considered as an

acquisition instrument. The Turkish Competition Authority authorized

this transaction by its decision dated 12.01.2010 and numbered 10-

04/49-24. However, in January 2010, Kiri India determined that it has no

sufficient funds to complete the acquisition process, therefore in order

to complete the transaction, it applied to Longsheng. By this application

Longsheng has acquired through a Convertible Standby Bond Agreement

dated 31.01.2010, Capital Stipulation and Shareholding Agreement,

an ordinary share, a convertible bond and a set of rights by the board

of directors and by the general assembly of Kiri Singapore through its

wholly-owned subsidiary Well Prospering Limited.

In accordance with the Convertible Standby Bond Agreement,

Longsheng has acquired the right to convert the aforesaid bond into the new

ordinary shares of Kiri Singapore in 5 years 6 days. Due to the agreement,

Longsheng obtained the right to convert the bond completely or partly in

order to acquire a part of the total and paid-up capital of Kiri Singapore.

Article of August 2011