Website for Publicly Traded Companies
Introduction
The website is one of the most important tools that reinforces the transparent management approach of companies and enables company stakeholders such as shareholders, company creditors, and those who carry out activities with the company to access important information about the company quickly and accurately.
Considering the importance of the website for companies, the legislator has made various regulations regarding the website, particularly under the Turkish Commercial Code No. 6102 (TCC). The most fundamental regulation regarding companies’ websites is the obligation to establish a website for companies subject to independent audit under Article 1524 of the TCC. The Regulation on the Websites to be established by Capital Companies was also issued to regulate the procedures and principles regarding the establishment of a website and the allocation of a certain part of this website for the publication of announcements required by law and for information society services.
However, the function of the website of publicly traded companies differs from that of non-publicly traded companies due to reasons such as the information asymmetry between investors and the company, and the need of investors for information regarding the company while making investment decisions. Accordingly, various obligations are imposed by the Capital Markets Law No. 6362 (CML) and the related communiqués regarding the use of websites and the documents required to be kept on these websites. This Newsletter article analyzes the essential information and documents that companies must keep on their websites within the framework of the capital markets legislation.
Corporate Information
General Information on the Company
The Corporate Governance Principles annexed to the Communiqué on Corporate Governance numbered II-17.1 introduces some compulsory and non-compulsory principles for publicly traded companies. Principle 2.1, which is not included among the compulsory principles in the Communiqué on Corporate Governance, regulates certain information that the corporate website should contain. Accordingly, in addition to the information to be examined in more detail under the following headings, the corporate website should also include (i) trade registry information, (ii) latest shareholding and management structure, (iii) detailed information on privileged shares, (iv) the current version of the articles of association, (v) information requests, questions and complaints received by the company under the frequently asked questions heading and the answers given to these, (vi) shareholding structure; (vi) shareholding structure; the names, amount and proportion of shares held by real person shareholders who hold more than 5% of the Company’s shares, and the privileges they have, net of indirect and cross-shareholding relationships.
In terms of the information to be included on the website, it is stated that in addition to Turkish the information can be provided in other foreign languages according to the need.
Company Policies
If applicable, (i) compensation policy for the company’s employees, (ii) policies on protection of stakeholders’ rights, (iii) remuneration policy for board members, (iv) company’s policy on repurchase of its own shares, (v) dividend distribution policy, (vi) disclosure policy, (vii) ethical rules established by the company are also published on the corporate web site.
Website within the Scope of Initial Public Offering of Shares
Prospectus
Under Article 28 of the Communiqué on Prospectus and Issuance Document numbered II-5.1 (Communiqué on Prospectus and Issuance Document), the prospectus shall be announced on the issuer’s website, in the public disclosure platform (“PDP”), and the website of the authorized institution within five business days following the date of application to the Capital Markets Board. After the prospectus is approved by the Capital Markets Board, it shall be announced on the issuer’s website, PDP, and the website of the authorized institution within fifteen business days following its receipt.
The issuer and the authorized institution, if any, shall take necessary measures to ensure that the prospectus published on the website is easily accessible by the investors and that the prospectus is preserved as approved on the website for a minimum period of five years.
Sale Announcement to Savers
The sale announcement to savers shall be published on the issuer’s website, PDP, if any, and the website of the authorized institution on the same day after the expiry of the new share purchase right exercise period or, if the new share purchase right is not exercised, after the announcement of the prospectus.
Price Determination Report
Under Article 29 of the Communiqué on Shares No. VII-128.1 (“Communiqué on Shares”), in the initial public offering of shares, the intermediary shall prepare the price determination report and at least two evaluation reports within one year after the shares start to be traded on the stock exchange. The price determination reports are published in the section of PDP related to the corporation and on the website of the authorized public offering intermediary.
It is obligatory for the company, whose shares are offered to the public for the first time, to prepare a report within ten business days following the public disclosure of its financial statements for a period of two years following the commencement of trading of its shares on the stock exchange, including assessments on whether the assumptions taken as basis in determining the public offering price have been realized or not, and if not, the reason thereof, and to publish the said report on the company’s website and PDP.
Fund Utilization Location Report
In case of a public offering of shares through a capital increase, a fund utilization report shall be prepared regarding the purposes for which the funds to be obtained from the capital increase will be used, and the fund utilization report shall be resolved by the board of directors and sent to the Capital Markets Board in the application for approval of the prospectus. A report shall be prepared within ten business days following the announcement of the first two financial statements containing the results of the capital increase, which are disclosed to the public as of the commencement of trading of the shares on the stock exchange, regarding whether the funds obtained from the capital increase are used as specified. Under Article 33/1 of the Communiqué on Shares, this report shall be published on the company’s website and PDP.
General Assemblies of Public Companies
As per Article 29 of the CML, the announcements calling the general assembly meetings of publicly held corporations shall be made at least three weeks before the meeting date, excluding the announcement and meeting days, by their articles of association. The announcement is also published on the company’s website and PDP. Along with the announcement, financial statements, consolidated financial statements, annual report of the board of directors, audit reports, and dividend distribution proposal of the board of directors are also disclosed to investors. In line with the Corporate Governance Principles annexed to the Corporate Governance Communiqué, the following issues must also be announced to investors:
- Total number of shares and voting rights reflecting the shareholding structure of the partnership as of the date of disclosure, if there are privileged shares, the number of shares and voting rights representing each privileged share group, and the nature of the privileges.
- Information on the changes in the management and operations of the Incorporation and its subsidiaries that occurred in the previous accounting period or planned for future accounting periods that will significantly affect the operations of the Incorporation and the reasons for these changes.
- If the agenda of the general assembly meeting includes dismissal, replacement, or election of board members, the grounds for dismissal and replacement, the backgrounds of the persons whose candidacy for board membership has been submitted to the partnership, the duties they have carried out in the last ten years and the reasons for their departure, the nature and materiality level of their relationship with the partnership and its related parties, whether they have the qualifications of independence, and information on similar issues that may affect the activities of the partnership in case these persons are elected as board members.
- Requests submitted in writing to the Investor Relations Department by the Company’s shareholders for the inclusion of items on the agenda, and in cases where the Board of Directors does not accept the shareholders’ agenda proposals, the rejected proposals, and the reasons for rejection.
- In case there is an amendment to the Articles of association on the agenda, the old and new versions of the amendments to the articles of association together with the relevant board resolution.
Questions asked at the general assembly meeting should be answered during the general shareholders’ meeting. However, questions that are not related to the agenda or that are too comprehensive to be answered may be answered by the Investor Relations Department after the general assembly meeting. The answers given to the questions asked in the general assembly meeting are published on the company’s web site within 30 days at the latest after the general assembly meeting.
Financial Reports
Under Article 14 of the Communiqué on Principles of Financial Reporting in Capital Markets numbered II-14.1 (“Communiqué on Financial Reporting”), those who prepare annual and interim financial reports within the scope of the Communiqué on Financial Reporting must publish these reports on their websites after they are publicly disclosed on PDP and keep them publicly available for at least 5 years.
Material Event Disclosures
The Communiqué on Material Events numbered II-15.1 requires publicly traded companies and issuers of capital market instruments to disclose certain important developments of public interest to protect market reliability by providing investors with equal access to information. The Communiqué on Material Events sets forth the principles regarding the disclosure of inside information and continuous information.
Issuers whose capital market instruments are traded on the stock exchange are obliged to announce the material event disclosures on the company website within the business day following the public disclosure at the latest and to keep the said disclosures on this website for five years. However, this obligation may also be fulfilled by providing a link to the PDP disclosures on the website of the company. As a matter of fact, in practice, many publicly traded companies fulfill this obligation by adding PDP links on their websites.
Mergers and Spin-offs
Under the CML, the procedures and principles to be followed in mergers and spin-offs where at least one of the parties is a publicly traded company are regulated in the Communiqué on Mergers and Spin-offs numbered II-23.2. Pursuant to the Communiqué on Mergers and Spin-offs, if (i) a decision is taken by the board of directors regarding the merger or spin-off transaction, (ii) an application is made to the CMB regarding the merger or spin-off transaction, (iii) an expert opinion is signed, (iv) a merger or spin-off agreement or plan is signed, and (v) a merger or spin-off report is prepared, the parties to the transaction whose shares are traded on the stock exchange are required to publish the relevant documents on their websites. In addition, at least 30 days before the date of the general assembly meeting where the transaction will be approved and for at least 5 years, certain documents related to the transaction must be available on the website.
Conclusion
Notwithstanding the obligation to open a website for joint stock companies subject to the conditions outlined in Article 1524 of the TCC, there are other separate and special regulations for public joint stock companies. Public joint stock companies need to pay attention to these regulations in the information and documents they keep on their websites during the public offering and subsequent processes.
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