The Articles of Law on Transfer of a Company’s Coupon, Bonds and Share Receivables, which are Barred by Prescription, to the State Treasury (“Law No 2308”) have been rescinded by a recent decision of the Supreme Court dated 20 June 2019. The Law No 2308 states that coupon, bonds and share receivables, which are not collected by shareholders for five (5) years should be transferred to the state treasury.
The Supreme Court has ruled that provisions of the Law No 2308, which foresee the transfer of uncollected coupons, bonds and share receivables to the state treasury are unconstitutional. The right to own property, freedom of labor and contract are guaranteed in the Turkish Constitution. Articles subject to objection interfere with the relationship between the company and shareholders/partners and thus interfere with the right to own property. Transition of the uncollected receivable premium, which is barred by prescription, to the state treasury may result in irrecoverable consequences for the company and for shareholders/partners. The government’s responsibility regarding private markets is limited to taking regulatory, protective and constructive measures and accordingly, the articles in question of Law No 2308 are unconstitutional.
According to the decision made by the Supreme Court, the transfer of uncollected receivable premiums has been found to be unconstitutional and therefore has been cancelled by the Turkish Supreme Court. Since further legislation regarding the transfer of uncollected receivables has not been published yet, new legislation may be published in the upcoming days to regulate the faith of uncollected coupon, bonds and share receivables. Until such legislation is published, shareholders will not lose their right to collect receivables after five (5) years.