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INTRODUCTION
The legislator has granted certain rights to the shareholders in order to balance the negativities created by the situation where the companies take decisions in line with the interests of the majority shareholders, and the right to request the appointment of a special auditor to the company is one of these rights. The right to request the appointment of a special auditor is a regulation that has been introduced to our law in order to strengthen the rights of shareholders by obliging the corporate bodies to disclose certain matters in connection with the right to obtain and review information.
1-APPOINTMENT OF A SPECIAL AUDITOR AND ITS CONDITIONS
According to Article 438 of the Turkish Commercial Code (TCC)
“(1) Each shareholder may request the general assembly to clarify certain events through a special audit, even if it is not included in the agenda, if it is necessary for the exercise of shareholding rights and if the right to obtain information or examination has been previously exercised.
(2) If the general assembly approves the request, the company or each shareholder may, within thirty days, request the appointment of a special auditor from the commercial court of first instance where the company's head office is located.”
The article states that each shareholder has the right to request a special audit from the general assembly, even if it is not included in the agenda, in order to clarify certain events, provided that he/she has previously exercised his/her right to obtain information and examination in order to exercise his/her rights arising from shareholding.
According to the legal regulation, the request for special audit must be submitted to the general assembly by the shareholder. The acceptance or rejection decision to be made at the general assembly meeting will determine how the process will continue. If the general assembly accepts the request for special audit, the company or each shareholder may apply to the commercial court in the place where the company headquarters is located within 30 days and request the appointment of a special auditor. In this case, if the general assembly accepts the special audit request, each shareholder has the right to request the appointment of a special auditor from the court. This right is not separately regulated in the Turkish Commercial Code, nor can it be removed or restricted by the articles of association or general assembly resolution. On the other hand, if the general assembly rejects this request, the right to bring the special audit request before the court is only granted to minority shareholders in order to ensure a balance of interests.
Pursuant to Article 440 of the TCC, the decisions of the court are final and legal remedies are closed against the rejection or acceptance decision of the local court.
1.1. Exercise of the Right to Information and Inspection
The right to request special audit is not a right that the shareholder can directly apply for, and in order to apply for the right to request special audit, the shareholder must first have exercised “the right to information and inspection”. Therefore, the right to request a special audit is a secondary right that can be applied as a last option. There is no explicit provision in the Turkish Commercial Code on when and how the right to information and inspection, which is a prerequisite for requesting a special auditor, should be exercised. There are different opinions on when the right to information and inspection, which is a prerequisite, will be deemed to have been exercised, and according to one of these opinions, if the shareholder exercises the right to information and inspectionin the general assembly, the prerequisite will not be deemed to have been fulfilled since the answers given by the general assembly will not have been evaluated. According to another opinion, although it is stated that both the right to information and inspectionand the appointment of a special auditor can be requested at the same general assembly meeting, the timing of the request to information and inspectionshould have been made earlier.
1.2. Necessary for the Exercise of Shareholder Rights
In the special audit request to be submitted by the shareholder to the general assembly, the shareholder must specify in detail which shareholder rights require the special audit. The shareholder must prove that the special audit is “objectively useful and necessary”for the exercise of his/her shareholding rights.
1.3.Purpose of Clarification of Certain Events
It is clearly stated in the law and its justification that the purpose of the special audit is “to clarify certain events”. Specific events must constitute the subject matter of the special audit. It can be said that the term specific means events that are identifiable, have specific content and boundaries, and are not of a general nature. Within the scope of this condition, any financial or administrative business, transaction, decision, financial status, financing need, decisions of the controlling company, if any, or losses incurred by the company.
1.4. The Request to be Put Forwarded in the General Assembly
In order for a special auditor to be appointed, this request must be made by each shareholder during the general assembly. Making such a request in the general assembly is a necessary stage to be exhausted for the application to the court.
It does not matter whether the general assembly meeting where the shareholder may submit the special audit request is an ordinary general assembly meeting or an extraordinary general assembly meeting. Neither Article 438 of the TCC nor the preamble of the article stipulates the form of the special audit request.
Although the meeting and decision quorum required for the general assembly to discuss the shareholder's special audit request is an important issue, there is no special provision in the TCC on this issue. Therefore, while determining the general assembly meeting and decision quorum for the special audit request, the general provision of Article 418 of the TCC, which is a general regulation, shall be taken into consideration.
According to Article 418 of the Turkish Commercial Code,
“(1) General assemblies shall convene with the presence of the shareholders or their representatives of the shares representing at least one fourth of the capital, except in cases where a higher quorum is otherwise stipulated in this Law or in the articles of association. This quorum must be maintained throughout the meeting. If the said quorum is not reached in the first meeting, no quorum is required for the second meeting to be held.
(2) Decisions shall be taken by the majority of the votes present at the meeting.”
2- THOSE WHO MAY REQUEST THE APPOINTMENT OF A SPECIAL AUDITOR
Pursuant to Article 438 of the TCC, the appointment of a special auditor may be requested by any shareholder at the general assembly. If the general assembly accepts this request, the company or the shareholders must apply to the court and request the appointment of a special auditor.
There is no consensus on whether the shareholder requesting information and examination and the shareholder requesting special audit should be the same person. In the justification of Article 438, it is stated that “It is not obligatory that the shareholder who has exercised the right to obtain and review information and the shareholder who requests special audit must be the same; however, the subject matter must be the same.” Again, in some court decisions, it is stated that in order to file a special auditor lawsuit, it is not obligatory that the shareholder who has exercised the right to obtain and review information and the shareholder requesting special audit must be the same person; however, the subject matter of the right to obtain and review must be the same. Moreover, although there are opinions in the doctrine to the contrary, it is also stated in the decisions that it is not necessary for the plaintiff shareholder to have attended the general assembly meeting where the special auditor request was rejected, or to have approved this request.
In the event that the general assembly rejects the special auditor request, according to Article 439 of the Law, not every shareholder can make a request to the court. Those who can make a request are minority shareholders, i.e. shareholders who constitute at least one tenth of the capital, or one twentieth in public joint stock companies, or shareholders whose shares have a total nominal value of at least one million TL.
The fact that the right to request special audit is an individual shareholding right recognised to the shareholders does not prejudice the minority shareholders to benefit from this right primarily. However, even if the shareholders who submit the special audit request to the general assembly in the first place are minority shareholders, this right cannot be characterised as a minority right, and will be characterised as an individual right arising from share ownership. Therefore, although Article 438/1 of the TCC states that each shareholder may request special audit, the minority is also authorised to request special audit from the general assembly based on its shareholding status.
3- COMMITMENT TO THE AGENDA OF GENERAL ASSEMPLY MEETING
Pursuant to Article 438/1 of the TCC, “Each shareholder... may request from the general assembly for clarification by special audit, even if it is not included in the agenda.”As it is clearly understood from the regulation, the special audit request is an exception to the principle of adherence to the agenda. In the preamble, it is stated that this condition should not be sought since the principle of agenda dependency condemns the special audit institution to dysfunction (Preamble to Art. 438/1 of the TCC). Therefore, any shareholder may request a special audit in order to clarify certain events, regardless of whether there is an item on the agenda of the general assembly. The general assembly cannot reject this request of the shareholder on the grounds that it is contrary to the principle of adherence to the agenda.
4- DURATION
If the request for the appointment of a special auditor is accepted by the general assembly, the company or the shareholders must apply to the court within one month. In the preamble of the article, it is stated that this one-month period does not have a prejudicial nature, and it is stated in the preamble of the law that the 3-month period stipulated for applying to the court in case the request is rejected by the general assembly is of a prejudicial nature.
5- ACCEPTANCE OF THE SPECIAL AUDITOR REQUEST BY THE GENERAL ASSEMBLY
In order to make a request according to Article 438 of the TCC,
-A request from the general assembly
-Exercise of the right to information and inspection
-Necessity for the exercise of shareholder rights
-Discovery of specific events
-The conditions of the general assembly's resolution of acceptance must be fulfilled.
If the conditions in the provision are met, each shareholder or the company may request the appointment of a special auditor from the court within 30 days.
6- RIGHT TO FILE A LAWSUIT IN CASE THE SPECIAL AUDITOR REQUEST IS REJECTED BY THEGENERAL ASSEMBLY AND ITS DURATION
Article 439 of the TCC states that “(1) In the event that the general assembly rejects the request for special audit, the shareholders constituting at least one tenth of the capital, or one twentieth in public joint stock companies, or the shareholders whose shares have a total nominal value of at least one million Turkish Liras may request the commercial court of first instance where the company's head office is located to appoint a special auditor within three months. (2) A special auditor shall be appointed in the event that the petitioners convincingly demonstrate that the founders or company organs have caused damage to the company or the shareholders by violating the law or the articles of association.” and the right to request the appointment of a special auditor from the court by the shareholders of the capital in case the general assembly rejects the special audit request is regulated.
Those who have the right to apply to the court in case the general assembly rejects the request for the appointment of a special auditor are,
-shareholders constituting at least 10% of the share capital and shareholders constituting at least 5% in public joint stock companies
-shareholders whose total nominal value of shares is at least one million TL.
If the general assembly rejects the request, the shareholders may request the court to appoint a special auditor within 3 months. This period is of a definitive nature.
If the general assembly rejects the shareholder's request for special audit, the right to request special audit, which is an individual right, is transformed into a minority right (justification of Article 439/1 of the TCC).
Pursuant to Article 439/2 of the TCC, in order to file a request to the court for the rejection of the request for the appointment of a special auditor by the general assembly, the founders or organs must cause damage to the company and the shareholders in accordance with the articles of association or the law. In addition, the shareholders must demonstrate this situation in a convincing manner.
According to Article 439 of the TCC, in order for the relevant parties to request a special auditor from the court,
In order for the court to appoint a special auditor upon the request of the minority, in addition to examining whether the conditions in Article 438 are present in the concrete case, the court must also seek the condition in the second paragraph. The additional condition in question is that the company or the shareholders have been harmed by violating the law or the articles of association. The violation also includes the breach of the unwritten rules of the joint stock company law. This additional condition is not required to be proved by credible evidence in the sense of procedural law, and it is deemed sufficient to be demonstrated by convincing facts or in a convincing manner. Damage refers to the loss of assets in the sense of the law of obligations.
7-COURT APPLICATIONS
While there are opinions in the doctrine that it is sufficient to request the right to obtain and review information at the general assembly meeting in order for the right to obtain and review information to have been exercised, the general practice of the courts is to wait for the outcome of the lawsuit requesting information and review, and if the shareholder's right to obtain and review information is not fulfilled as a result of this lawsuit, a lawsuit requesting a special auditor should be filed.
The view that the condition that the right to information and inspection has been exercised will be deemed to have been fully fulfilled with the conclusion of the lawsuit requesting the appointment of a special auditor is included in the justifications of the rejection decisions of the lawsuits requesting the appointment of a special auditor. In the decision of the Istanbul 12th Commercial Court of First Instance dated 27.05.2024 and numbered 2024/266 Esas 2024/447 Karar and dated 27.05.2024, it is stated that the right to information and inspection must be exercised in order to request the appointment of a special auditor according to Article 438/1 of the TCC. It has been determined that the right to request special audit cannot be exercised without exercising the right to information and inspection, in other words, this is a prerequisite for the exercise of the right to request special audit; and according to Article 437/5 of the TCC, “The shareholder whose requests for information or review are left unanswered, unjustly rejected, postponed and who cannot obtain information within the meaning of this paragraph may apply to the Commercial Court of First Instance where the head office of the company is located within ten days following the rejection, and in other cases after a reasonable period of time.”, the prerequisite for the appointment of a special auditor, as defined by the law, cannot be fulfilled until the procedure related to the right to obtain information is carried out and the right to information and inspection is fully exercised in terms of the requests that constitute the subject of the lawsuit.