NEWSLETTER-2020-metin

41 COMMERCIAL LAW Code, the representation rights pertaining to the pledged share certifi- cates at the general assembly meetings belong to the pledgors, not the pledgees. In this respect, pursuant to Article 942 of the Civil Code, the pledgors are not entitled to establish a pledge over the pledged share certificates without the consent of the pledgors. The requirement of Approval for Transfer The disposal rights on the pledged share certificates, in principle, also belong to the pledgor. Having said this, the undertakings regard- ing not to subject the pledged shares to a transfer or another pledge are often foreseen under pledge agreements. Especially, in the event that the pledgee is a financial institution, such restriction on dispositional acts is often drafted in a broad manner, and forbids the establishment of any right to the benefit of a third party. The provision under Article 869 of the Civil Code stating that the undertakings are not to establish a third party over a pledged immovable, is not repeated for the pledged movables. In this context, provided that such a restriction limiting the dispositional rights of the pledgor are not constituted under the agree- ment, the dispositional rights remain with the pledgor. Transfer Procedure Pursuant to Article 490/2 of the TCC, “Transfer through a legal transaction, may be conducted by way of transfer of possession of the registered share certificate to the transferee.” The dispositional act with respect to the transfer of shares is mainly comprised of two pro- cesses. These two processes are significant for the shares upon which a pledge or another right to a third party is granted. Pursuant toArticle 943 of the Civil Code, the pledge terminates in the event that the possession of the pledgee concludes and the pledgee loses its capability to retrieve the certificate from the third party pos- sessor. Such a termination event is referred to as “absolute loss of the possession ” 3 . In this context, in order to procure the continuance of the rights on the pledge, the possession of the certificate must be main- 3 Oğuzman/Seliçi/Özdemir, p. 1011; Göksoy, Can : Anonim Ortaklıkta Payın Rehni, 1. ed., Seçkin Yayıncılık, Izmir, 2001, p. 367-368.