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COMMERCIAL LAW
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Article 479/3 of the New TCC lists the resolutions for which the
preference voting right cannot be exercised. These resolutions are the
resolution concerning the amendment of the articles of association,
appointment of operation auditors and resolutions concerning the relief
and claims based on the responsibility of directors. Besides being
important resolutions, the aforesaid resolutions may result with the
control of some shareholders in the company. This provision of the New
TCC aims to prevent the abuse of preference shares by the shareholders
who intend gain control over the company.
Representation of Share Groups in the Board of Directors
Even though the right to nominate candidates to the board of directors
(BoD) was not recognized by Article 401 of the TCC, it was accepted by
the doctrine as a
“preference on similar issues”
. Pursuant to Article 360
of the New TCC, (a) certain share groups, (b) shareholders that form
a certain group in terms of their characteristics, and (c) the minority
shareholders may be granted a right to be represented in the BoD. With this
disposition, the representation right has been reframed in such a way to be
an exception to Article 478 of the New TCC, besides being a preference
granted in favor of a share. This article grants the representation right
in favor of shareholder groups, minority shareholders and share groups.
The fact that these groups can be determined is sufficient. The aforesaid
right is granted in favor of certain shareholder groups, share groups and
minority as a whole, and not to each share. The TCC does not include
a similar exemption, but the precedents of the Court of Appeal which
have been consistently applied for a long time provide the application of
“group preference”.
Preference Shareholders Special Committee
Article 454 of the New TCC, resembles to the TCC, regulates that
certain resolutions of the general assembly (“GA”) that may infringe the
rights of preference shareholders shall not be applied unless approved by
a resolution adopted in a special meeting held by preference shareholders.
Those resolutions are the resolution on the amendment of the articles of
association, resolution on the authorization of the BoD concerning the