NEWSLETTER-2019-metin

68 NEWSLETTER 2019 acquisition of its own shares 4 . Correspondingly, one of the common practices used for the elimination of the prohibition of financial as- sistance, and to procure the financing of the shares through the tar- get company’s assets, is the merging of the purchaser and the target company under the target company’s legal personality, following the acquisition of the shares of the target company. In such instance, the obligations arising from the financing of the acquisition are transferred to the target company as a result of the complete succession applicable in mergers. Upon completion of the transaction, the target company becomes the obligor arising from the financing of the acquisition of its own shares 5 ; in other words, the as- sets of the target company are used for the financing of the acquisition of its own shares 6 . Therefore, the matter as to whether such transaction should be deemed to be within the scope of the said prohibition has been discussed amongst the scholars. Upstream Merger In the event that an upstreammerger is implemented, the purchaser and the target company merge under the purchaser’s legal personality following the acquisition of the shares. In the evaluation of the pro- hibition as to financial assistance, the doctrine embraces a distinction on the direction of the merger realized in relation to the acquisition 7 . Such distinction originates from the fact that the legal entity of the company, whose shares have been acquired in the upstream merger, has terminated, and that such legal entity is not indebted with respect to the obligations arising from the financing of its own shares at any stage of the transaction 8 . It is further affirmed that the provisions as to mergers provide adequate protection to the shareholders and the credi- tors in such transactions. Nevertheless, the authors alleging invalidity of such transactions base their claim on the fact that financial obliga- tions are fulfilled through the assets of the target company. 4 Yanlı, Veliye : Şirketin Kendi Paylarını Edinmesinde Finansal Destek Yasağı , Banka Hukuku Dergisi, 29(2012), p. 38. 5 Yanlı, p. 40. 6 Yanlı , p. 32. 7 Yanlı , p. 39. 8 Gürel, p. 196.