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subsidiary, the right to buy out the minority shares and thereby achieve
full dominance. The TCC enables companies to achieve the freedom of
management granted under Art. 208
4
.
Conditions
TCC Art. 208 requires the fulfillment of certain pre-conditions in
order to exercise squeeze-out rights.
– Only commercial corporations may exercise squeeze-out rights.
The article does not mention dominant undertakings along with
dominant companies. Therefore, a squeeze-out right is granted to a
dominant
company,
which owns ninety percent of the shares and voting
rights in a subsidiary.
– The dominant company should directly or indirectly hold ninety
percent of the shares and voting rights in its subsidiary.
Indirectly owned shares and voting rights should be construed
as shares and voting rights held by the dominant company through its
subsidiaries.
– There should be a just cause for squeezing-out the minority.
TCC Art. 208 considers reasons such as the minority preventing the
operation of the company, acting against the good faith principle, causing
substantial difficulties and acting recklessly as just causes for squeeze-
out. Examples may be given such as abusing shareholding and minority
rights, and harassing company managers. Nevertheless, it is very difficult
to conclude when the exercise of rights, such as initiating annulment
lawsuits against corporate body decisions and resolutions, casting negative
votes regarding matters necessitating unanimity, postponing negotiations
on the balance sheets and similar rights are to be construed as an abuse of
such rights which violate the good faith principle
5
.
4
(Assist.) Assoc. Prof.
Okutan Nilsson
, Türk Ticaret Kanunu Tasarısın Göre Şirketler
Topluluğu Hukuku (Law of Group Companies Pursuant to the Draft Turkish Commercial
Code), Levha Yayınları, Istanbul 2009, p. 437.
5
Akın
, ibid, p. 14.