NEWSLETTER-2020-metin

Communiqué on the Principles of Abolishing Privileges* Att. Nezihe Boran Introduction According to Article 28 ( Privileged Shares ) of Capital Markets Law No. 6362 1 (“Capital Markets Law”), as per the principles deter- mined by the Capital Markets Board (“Board”), the Board may abolish priviledges regarding voting rights and representation on the board of directors of a publicly held company that has suffered losses for five consecutive years accprivelording to its financial statements. Despite the fact that the aforementioned regulation has been in force since the effective date of the law, i.e. 30 December 2012, the Board has not enacted any regulation regarding the procedures and principles to be followed. Within this scope, the Board prepared the Communiqué on the Principles of Abolishing the Priviledges on Voting Rights and Representation on Boards of Directors (II-28.1) (“Communiqué”). The Communiqué entered into force through its publication on the Official Gazette on 10 January 2020. This article will mainly focus on the scope of the procedures and principles related to the revocation of the priviledges detailed under the Communiqué. The Purpose and Scope of the Communiqué The purpose of the Communiqué is to regulate the procedures and principles relating to the removal of the priviledges for the voting rights and representation on the boards of directors of publicly held companies that have suffered losses for five consecutive years accord- ing to its financial statements prepared in line with the legislation. The priviledges that fall within the scope of the provision have further been defined under the Communiqué. Pursuant to the first paragraph * Article of January, 2020 1 Capital Market Law No. 6362, OG No. 2851330, 12.2012.