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NEWSLETTER 2013

114

The Characteristics and Means of Exercise of this Right

The TCC foresees the squeeze-out right as an innovative right. The

dominant company, through exercise of this right, may purchase the

minority shares without obtaining the minority’s consent or approval.

It is not explicit and clear from the wording of the article whether

this right may be exercised through a unilateral declaration or whether it

necessitates the issuance of a court order. The legislative justification of

the article states that the decision is left to the courts in order to prevent any

misuse; nevertheless the wording of the article is different than that of the

draft commercial code of 2005, the year when its legislative justification

was drafted. Nonetheless, Art. 208 refers to Art. 202/2 regarding how

the purchase price should be determined, and the sell-out right regulated

under Art. 202/2 may be exercised through a court order. Hence, the

squeeze-out right granted under Art. 208 is an innovative lawsuit. The

court should especially determine whether there is a just cause, as well as

the share purchase price

The purchase price of the shares is the market price, in the absence

of which the value should be determined in accordance with Art. 202/2.

Pursuant to Art. 202/2, in the absence of a market share or if the market

share is not equitable, the shares will be purchased based on their actual

value or their value should be determined in accordance with a generally

accepted valuation method.

Conclusion

TCC Art. 208 regulates the right of a dominant company within a

group of companies to purchase minority shares and squeeze-out the

minority, in order to achieve peace within the company. As specified in

the legislative justification of the article, this provision aims to establish

peace within the company and enables squeezing-out a problematic

minority from the company. Simultaneously, dominant companies are

granted an opportunity to obtain full control over their subsidiaries

through this right.

Okutan Nilsson

, ibid. p. 442-444.