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More importantly, in order for the special committee of preference
shareholders to be convened, the law specifically requires that the
rights of the preference shareholders have been violated. The fact that
the resolution of the general assembly or the board of directors was
unlawful shall not suffice for the convening of the special committee.
Convening the Special Committee of Preference Shareholders
TCC Art. 454/2 stipulates that the special committee of preference
shareholders shall be convened by the board of directors. In accor-
dance with the relevant article, the board of directors shall convene the
special committee of preference shareholders no later than one month
following the announcement of the general assembly resolution. This
authority of the board of directors is unassignable. Unless the special
committee of preference shareholders is convened by the board of
directors within this period, each preference shareholder is entitled to
apply to the commercial court of first instance to convene the meeting
within fifteen days following the last day of the convening period set
forth for the board of directors. Therefore, the law entitles the prefer-
ence shareholders to convene the meeting. The aim of this provision is
to enable the court to make an unbiased decision in order to balance the
conflicts of interest.
Meeting of the Special Committee of Preference Shareholders
Pursuant to Art. 454/3 of the TCC, the special committee of pref-
erence shareholders convenes with the presence of 60% or more of the
share capital representing the preference shares, and the decision by
the majority of the shares represented at the meeting. In addition, if the
preference shareholders cast affirmative votes at the general assembly
for the resolution in question, there will be no convening of a special
committee meeting.
Moreover, TCC Art. 454/3 sets forth certain steps to be performed
where the special committee decides that a violation has occurred with
respect to the rights of the preference shareholders. Accordingly, the
decision is confirmed with justified minutes, and the meeting minutes
are delivered to the board of directors within ten days following the
date of the decision. Therefore, if the preference shareholders decide
that their rights have been infringed, they must provide sufficient rea-
soning with respect to the infringement. Additionally, the list of a min-
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