NEWSLETTER-2019-metin

67 COMMERCIAL LAW Applicability of the conditions of Article 380 with respect to the prohibition points to the presence of a purposeful connection, and does not call for the chronological order, or any other element for the same. However, due to the difficulty to evidence such purposeful connection by third parties, the existence of a purposeful connection is assumed to exist upon the existence of a temporal or functional connection. Accordingly, within the scope of the prohibition of any financial sup- port, both merger transactions, as well as various other methods, are discussed in many different aspects by the scholars. One of the most discussed aspects is the direction of the merger. In addition, there are certain scholars who attribute importance to different aspects on the determination of the applicability of the prohibition of financial assis- tance, such as the timing of the merger, and the material and functional link between the merger and acquisition. Consequently, due to the ambiguity created by the Article, and the fact that the sanction to be implied in breach of such prohibition is null, this subject is frequently discussed in the doctrine. In such case, determination of the conditions and elements of the prohibition of financial assistance for the assessment of applicabil- ity to certain transactions is of significant importance. The following three conditions must coexist in order for the prohibition of financial assistance to be applicable, and these are: (i) share acquisition; (ii) financial assistance; and (iii) purposeful connection between the fi- nancial assistance and the share acquisition 3 . In light of the foregoing, in thisArticle, three commonly discussed scenarios will be evaluated in terms of the said prohibition. Downstream Merger In the event that a company acquires the shares of another com- pany, through third party financing, and then merge with the target company, it is controversial whether the target company is, or should be, deemed ‘to be providing financial assistance’ in the course of the 3 Paslı, Ali / Veziroğlu, Cem : Hedef Anonim Ortaklığın Kâr Dağıtımı ve Bu Yöndeki Taahhüdü Finansal Yardım Yasağını (TTK 380/1) İhlal Eder Mi? , Istan- bul Hukuk Mecmuası, 2018, 76 (1), p. 259.