Aims of Communiqué
Protocol to declare loss


On 10 January 2020, the Communiqué on the Principles regarding the Revocation of Privileges on Voting Rights and Nomination to the Board of Directors (the Communiqué) was published in the Official Gazette. The Communiqué regulates the procedures and principles with respect to publicly held corporations that have made a loss for five consecutive years (according to their financial statements) regarding the revocation of privileges of:

  • exercising the voting rights; and
  • nomination of the board of directors.

Aims of Communiqué

The Communiqué aims to ensure that:

  • privileged groups act in accordance with the interests of other shareholders;
  • the members of the board of directors nominated by certain share groups are more effectively supervised; and
  • people with better management skills are appointed as board of directors by taking into account the principle of protection of unprivileged shareholders.

Protocol to declare loss

As per the Communiqué, the Capital Market Board (the Board) has the authority to rescind privileges of (1) exercising the voting rights and (2) nomination of the board of directors, in public companies that have made a loss for five consecutive years. The calculation of the five-year period starts from:

  • the accounting period ending on 31 December 2013 for publicly held corporations whose fiscal year is a calendar year; or
  • the annual special accounting period ending in 2014 for publicly held corporations with a special accounting period.

Public companies that declare a loss for five consecutive years shall submit their explanations regarding the reasonable and compulsory conditions of the loss. This explanation is submitted to the Board within 20 business days from the date they disclose their financial statements for the fifth accounting period, if any, in all or in any of the five accounting periods.

In its assessment of a reasonable and compulsory situation, the Board considers whether any adverse events have developed beyond the control of the company's management that affect the economy, sector or company in question.

If the Board determines that the loss in relation to the five-year period is caused by circumstances beyond the control of the company's management that affect the sector, it may decide that there is no need to revoke the privileges. In such a case, the Board notifies the company that if the company declares a loss for another five consecutive years, starting from the notification date, it needs to apply to the Board again in accordance with paragraph 6/1 of the Communiqué.

However, if the privileges are revoked by the decision of the Board, a notification is made to the Central Securities Depository to ensure that the privileged shares are converted into unprivileged shares as of the Board decision date. The Ministry of Commerce is also notified in order to prevent the revoked privileges from being exercised in general assembly meetings.

The Communique regulates the acquisition of management control by ownership of more than 50% of the existing voting rights in the relevant partnership, as a result of the Board decision to revoke the privileges, as an exception of the obligation to make a takeover bid stipulated under the Communiqué On Takeover Bids.


It should be noted that the Communiqué is aimed at revoking privileges regarding to the voting rights and being represented on the board of directors to protect the rights of minority shareholders and does not aim to appoint trustees and/or members of the board of directors to companies.

For further information please contact Neslihan Tuna Saracgil at Selvi Attorney Partnership by telephone (+90 212 258 40 40) or email ([email protected]). The Selvi Attorney Partnership website can be accessed at


(1) No. 31004.

(2) Published in the Official Gazette on 23 January (No. 28891).