Turkey: Regulation Regarding The Electronic General Assembly Meetings Of Joint Stock Companies

The regulation regarding the electronic general assembly meeting of joint stock companies in the light of the New Regulation published in the Official Gazette dated 28.08.2012

As it is known, the way to hold electronic general assembly of shareholders has been legally cleared with Article 1527 of the New TCC. With the authorisation granted under the respective Article, the Regulation on Electronic General Assembly Meetings (the "Regulation") which has been prepared by the Ministry of Customs and Trade, was published in the Official Gazette dated 28 August 2012. The provisions of the Regulation will become effective as of 1 October 2012.

With the introduction of the new provisions, especially for the general assembly of companies with foreign shareholders; it has become possible for foreign shareholders to attend general assembly meetings from where they are located. As per Article 1527 of the New TCC, if such is provided under the company agreement or articles of association, board of directors meeting may be held electronically with the attendance of all the members or certain members may attend an ongoing physically held meeting electronically. In such case, the quorum for meetings and decisions provided under the articles of association of the respective company or the law will continue to be applicable.

Pursuant to Article 2 of the Regulation; the respective Regulation has been prepared for the purpose of regulating the principles and procedures of electronic attendance, providing suggestions, raising opinions and voting at the general assembly meetings of joint stock companies; providing a template articles of association provision on electronic attendance and voting; regulating the principles of voting by the right holder or his proxy; regulating the operation principles of Electronic General Assembly System (EGAS) and the liabilities of the attendants to such system.

EGAS is identified under Article 4 of the Regulation as the;

• Software system provided by the Central Registry Agency for quoted companies, or
• For other companies as the software system developed on their own or outsourced.

Companies wishing to apply EGAS shall include the template provision, which is provided in Article 5 of the Regulation, under their articles of association. The respective provision is as follows;

"The right holders who have the right to attend the general assembly meetings of the company may also attend these meetings in the electronic environment as per Article 1527 of the Turkish Commercial Code. The company may either establish the general assembly system that will enable the right holders to attend the general assembly meetings in the electronic environments, express their opinions, make suggestions and vote or buy a service from the systems that are created for this purpose as per the provisions of the Regulation related to the General Assemblies of the Joint Stock Companies to be Realised in the Electronic Environments. As per this provision of the articles of association, it shall be ensured in every general assembly meeting that the right holders and their representatives shall be using their rights which are described in the provisions of the mentioned Regulation through the created system."

As per Article 6 of the Regulation; it is required for the companies that shall apply EGAS to make available the invitations which are obligatory to make as per the articles of association and the Law regarding the general assembly meetings, the documents that are obligatory to submit for the review of the right holders before the general assembly and the documents related to the meeting agenda for the access of the right holders in EGAS as bearing the secure electronic signature and within the period foreseen in the Law.

The obligation of the shareholder to make the notification regarding the electronic attendance to the general assembly is another reform introduced by the Regulation. If a representative instead of the right holder shall attend the meeting, it is obligatory to insert the representative's identity information to the system. As per Article 8 of the Regulation, the attendance to the general assembly in the electronic environment shall be realised with the right holders and representatives' entry into EGAS with their secure electronic signatures.

According to the procedure stipulated in Article 12 of the Regulation; the attendants' list and the meeting minutes shall also be delivered to the Ministry representative at the end of the meeting within an environment which is convenient for carrying and keeping electronic documents.

Finally, we would like to state that as per Temporary Article 1 of the Regulation, the amendments to the articles of association to be realised within the scope of this Regulation must be realised by the companies quoted on the stock Exchange whose shares are monitored in record by the Central Registry Agency in the first general assembly meeting to be realised following the enforcement of this Regulation. The obligation for creating the necessary system for the right holders to attend the general assembly meeting in the electronic environment and enabling the right holders to attend in the electronic environment as of the enforcement date of this Regulation shall not be abolished, in case this amendment to the articles of association shall be realised in the first general assembly.

You may kindly find the Regulation in the following link.

http://www.resmigazete.gov.tr/eskiler/2012/08/20120828-3.htm

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.