2016.ANA METIN ingilizce.01

and/or directly. The hidden income shifting may be performed via pub-

lic company’s subsidiary and/or affiliate, in person, or through its sub-

sidiary and/or affiliate. Accordingly, along with direct income shifting,

damages may occur within a public company, by virtue of the transac-

tions conducted within the scope of the group relation

Together with the protection of the incomes of publicly held joint

stock companies, another impact of the aforementioned regulation is

that it introduces a provision parallel to the protection of the assets

principle, which is also regulated under the Turkish Commercial Code

(“TCC”). Through this provision on the prohibition of the hidden

income shifting, the assets of the public company are protected, and

the opportunity for the minority shareholders to obtain efficient and

necessary amount of dividend is enabled. Additionally, it should be

noted that the hidden transactions that result in the reduction of com-

pany’s profits or assets, in other words, those transactions that cause

damage, are generally considered as collusive transactions

The third paragraph of CML Article 21 imposes documentation

and safekeeping obligations, and sets forth that “The public companies

and collective investment schemes are obliged to certify that the

related party transactions have been performed in accordance with

arm’s length principles, market practices, prudence and honesty

principles of commercial life, and to preserve the documents and

information so certifying for at least eight years. The Board shall

determine the principles and procedures to be followed where a

violation of the principles set forth under paragraph 1 occurs.”

In the third paragraph of the said Article, the public companies and

collective investment schemes shall be obliged to provide certification

that the related party transactions have been performed under the

conditions that are in conformity with the arm’s length principle,

market practices and prudence and honesty principles of commercial

life, and are obliged to keep the documents and information so

certifying this for at least eight years.

The fourth and last paragraph of CML Article 21 regulates the

sanction that shall be applied where hidden income shifting occurs. In

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NEWSLETTER 2015

Arslan Kaya

İÜHFM C. LXXI, S. 2, p. 193-204, 2013.

Akbulak/Akbulak

, Sermaye Piyasası Araçları p. 386-387.