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article 329 of the TCC, the New TCC has not contemplated that buy-
back transactions shall be null and void if they are in violation of the
provisions set forth hereinabove
6
. To the contrary, it has been foreseen
that such shares will be disposed of, therefore it has been accepted that
a company may acquire its shares by violating these provisions.
Conclusion
The TCC has prohibited and declared the share buyback of com-
panies null and void, save for certain exceptions. It is disputed whether
public companies may or may not buyback their shares traded on the
ISE as per the principal resolution of the CMB dated 10 August 2011,
since it violates the share buyback prohibition set forth under the TCC.
The New TCC has introduced an important reform by enabling the
companies to buy back its shares through authorizing its board of
directors for acquisition of its own shares not in excess of 10% of the
share capital. Furthermore, the board of directors may realize such
transactions without any authorization in the event there is a risk of a
serious and probable loss to be incurred by the company. The possibil-
ities for the company to buy back its shares in exceptional cases such
as capital decrease or total transfer of assets or gratuitous acquisitions
have been preserved.
As it has been discussed in detail above, to cope with any loophole
breakdown of share buyback provisions, financial assistance in acqui-
sition financing transactions has been prohibited. Pursuant to this pro-
hibition, the financial assistance transactions of the company in order
for the third persons to acquire shares of the company shall be null and
void. This regulation will be analyzed in a separate article of our
newsletter
56
NEWSLETTER 2012
6
See
Dr. Alihan Aydın
,
ibid
., p. 313 onwards for discussions on the consequences of violating
the mandatory provisions under article 379 and the following articles.