Newsletter-21

20 NEWSLETTER 2016 Unlawful Exercise of Dominance* Av. Ecem Cetinyilmaz Introduction According to the definition provided under Article 195 of the Turkish Commercial Code No. 6102 1 (“TCC”) where a company directly or indirectly holds the majority of voting rights in another company, or holds the right to appoint the members to the manage- ment body of another company as per the articles of association in a number that constitutes the majority to make decisions, or constitutes among its own voting rights the majority of the voting rights alone or together with other shareholders or partners based on an agreement, or keeps such company under its dominance pursuant to an agreement, or otherwise; the first company is the dominant company, and the other is the dependent company. Dominance does not entitle the dominant company to exercise such power against the dependent companies unlawfully. As in all unlawful exercises several consequences are at- tached to this unlawful exercise under Article 202 of the TCC and the following articles. This Newsletter examines the situations where dominance is exercised unlawfully and the consequences attached thereto. Unlawful Exercise Exercise of dominance by the dominant company so as to cause losses to the dependent company is deemed unlawful. Unlawful exer- cise situations are listed under Article 202 of the TCC without limita- tion. Direction of the dependent company by the dominant company to conclude legal transactions such as transfer of business, assets, funds, personnel, receivables and debts; to decrease or transfer its profits; to * Article of April 2016 1 Turkish Commercial Code No. 6012 was published in the Official Gazette dated February 14, 2011 and numbered 27846, and entered into force on July 1, 2012.