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. After deduction of the repurchased share price, the assets of the

company shall be at least equal to the sum of the share capital or the

issued capital and the non-distributable reserves pursuant to the law or

the articles of association. The repurchased share pursuant to this arti-

cle must be totally paid up. In order to circumvent any concerns with

respect to protection of the capital, article 388 expressly provides that

a company may not subscribe to pay its own shares.

Article 381 regulates the share buyback not subject to the general

assembly authorization decision, which is one of the conditions under

article 379. Pursuant to this article, the board of directors may buy

back shares in order to circumvent a serious and probable loss, without

an authorization. Nevertheless, the board of directors shall inform the

company in the first following general assembly meeting with respect

to the purpose of this purchase, total number of shares and total nomi-

nal value of the shares bought back as well as their percentage to the

share capital, the total amount paid and the conditions of payment.

Under article 382, the exceptional cases where the company may

buy back its shares without being subject to the conditions and restric-

tions set forth above have been regulated, which is similar to article

329 of the TCC. These exceptional cases are the share buybacks of the

companies for capital reduction, as a result of transactions involving

the transfer of business as a whole, in order to collect a receivable from

execution proceedings or levied by security companies.

Lastly, article 383 foresees that a company or its subsidiary will be

immune from the ten percent threshold band as long as such purchase

is made without paying any consideration (gratuitous).

The New TCC article 389 has a provision similar to the provision

in the TCC with respect to the consequences of the shareholder rights

in cases of share buyback of a company. Such shares (bought back)

shall not be taken into consideration in the calculation of general

assembly quorums. Apart from the shares repurchased gratuitously

pursuant to article 383, the repurchased shares shall grant no share-

holder rights to the company.

NEWSLETTER 2012

Prof. Dr. Ünal Tekinalp

ibid

., par. 9-29.