243 / 522
accordance with this paragraph, the public companies, collective
investment schemes, together with their subsidiaries and affiliates,
shall request from the parties to which an income transfer has been
made, to return the transferred amount and its legal interest to the com-
pany or collective investment scheme whose assets or profits have been
reduced, within the timeframe determined by the Board, where the
income transfer has been detected by the Board. Moreover, the parties
that have received an income transfer are obliged to return the trans-
ferred amount with its legal interest within the period determined by
the CMB. Additionally, civil, penal and administrative sanctions may
be applied in accordance with Articles 94 and 110 regarding the viola-
tion of the prohibition of hidden income shifting.
Within this context, the public company may request the repay-
ment of the transferred amount, with interest, and disclose the audit
results to the public, where income shifting is detected by the CMB.
Sanctions, such as filing a restitution lawsuit, requesting compensation
for the breach, filing lawsuits regarding annulment-nullity-invalidity,
revocation of signatory authority, and/or dismissal may be applied with
regards to the said transaction. “Abuse of Confidence” and
“Administrative Fines” may be applied with regard to criminal liability.
In conclusion, as far as hidden income shifting is concerned, com-
pany assets will be negatively affected, and the subsequent decision of
the investor will be negative as a consequence of the low profits.
Additionally, the value of the securities will also be low. Therefore, the
shares should be exchanged more frequently, and generally, the circula-
tion should be in a manner that would result in the shares being trans-
ferred to major shareholders. Within this context, as per the regulation
of Article 21 of the CML, the protection of the public company and,
accordingly, the investing shareholders, and the prevention of company
sources to be transferred to the related persons that have a controlling
power, is intended. By virtue of this provision, the intervention to the
source transfers/hidden income shifting transactions, directly, or indi-
rectly executed, and whose execution is procured through the board of
directors by those persons with the controlling power over the compa-
ny, will reduce or prevent the increase of the company profits or assets
7
.
CAPITAL MARKETS LAW
227
7
Arslan Kaya
İÜHFM C. LXXI, S. 2, p. 193-204, 2013.