Turkey: Disclosure Requirement Of Public Joint Stock Company

Last Updated: 23 September 2019
Article by Öykü Kurt


To provide accurate information for investors operating in Turkey, public disclosure of the necessary information has a great importance for the continuation of the functioning of the capital market in a fair and competitive environment. Thus, the procedures and principles regarding Public Disclosure of Publicly-Held Joint Stock Companies are regulated in detail in both Article 460 of the Turkish Commercial Code No. 6102 ("TCC") and Article 15 of Turkish Capital Markets Law No. 6361 ("CML").

Although there is no definition of the Public Disclosure principle according to TCC and CML, it is possible to say that the legislator does not limit this principle and paves the way for the principle to adapt to the changes.1


The principle of public disclosure aims to protect both the small investor trading in the securities and to ensure fair order in the market with the access of equal information to the small investor. In this way, the reliability of the market shall be increased and the information which cannot be reached by small investor, will be provided and all kinds of investors in the market will be able to make a reliable evaluation within the framework of the presented information. In this context, investors shall evaluate the publicly held partnership and make their decisions according to this evaluation and investors shall shape their investment decisions according to the information they have acquired. For instance, as a result of the decisions which is taken by a joint-stock company, the investor who thinks that his investment may affect the future of the corporation will be able to dispose of his share in the corporation through the stock exchange and turn to capital market instruments. This situation has a great importance in terms of gaining the trust of the financial institutions by the public disclosure of investors operating in sectors such as pharmaceuticals and automotive, where financing is needed due to innovation and R & D. 2


The right to information and inspection of shareholders; individual, acquired and independent nature, usually complementary or affirming each other.3 Even if the right to information and inspection is exercised, it is not possible to cancelled or limited by the articles of association or a resolution passed by an organ of the company according to Article 437 of TCC. Pursuant to Article 447 of TCC, general assembly resolutions shall be null if they restrict a shareholder's right to information, inspection and control beyond the legally permissible degree. Within the scope of this right granted to shareholders can request to information and inspection about the following;

  1. Financial statements and consolidated financial statements,
  2. Annual activity report of the board
  3. Income statement and balance sheet,
  4. The Audit reports,
  5. Profit distribution proposal of the board,
  6. Corporate's actions, inspection method and results,
  7. The commercial books and communications of the company.

In addition, for the previous fiscal year, the board shall prepare and submit to the general assembly, the financial statements stipulated in the Accounting Standards of Turkey, attachments thereto and an annual activity report within 3 (three) months of the fiscal year that follows the balance sheet date.4 The financial statements, consolidated financial statements, annual activity report of board, equity capital statements, annexes, audit reports and profit distribution proposal of the board which is prepared and submitted must be made available to the information and examination of the shareholders at the headquarters and branches of the company at least 15 (fifteen) days before the general assembly meeting. It is also possible for the shareholders to obtain a copy of the income statement and balance sheet as a result of the right to inspection.

In addition, these statements shall be kept open for a period of one years in order to enable shareholders to obtain information as a result of their own inspection in headquarters and branches. In addition to the right to information about the Corporate action, it is also possible for the shareholders to obtain information from the board about the manner and results of the audit.

In this direction, it shall not mean that the auditor who is not within the company and appointed by the external auditor has no obligation to provide information. According to this rule, the board of directors and the auditors are obliged to inform the shareholders by a careful manner in accordance with the principles of accountability, truth and honesty. It is important to note that if any of the shareholders have been informed about any matter other than the general assembly, upon request, the same information must be provided to the other shareholders in the same scope and detail, even if not on the agenda, in accordance with the principle of equal treatment. The right to information and inspection includes the right of inspect to commercial books and communications of the company.5 In this case, if the shareholder makes a request in the general assembly regarding his request to inspect the commercial books and communications of the company, this shall form an exception to the principle of subservience agenda.

However, in any case, the permission of the general assembly shall be required for the right to information to be transformed into right to an inspection. After approval by the General Assembly, the inspection of the commercial books and communications of the company by the expert shall also be deemed to have been approved. Although the right to information has been defined as an acquired to shareholders, certain restrictions shall be required if such right exists as a trade secret or company interests that need to be protected. As follows, If the information requested by the shareholders is within the scope of the trade secret, it will be evaluated within the scope of the restriction if there is any information that competitor companies do not know, don't need to learn and that can be used for the loss of the company. However, these limitations cannot be restricted without asserting that only company or trade secrets or other company interests that shall be protected may be compromised. The right to information can only be restricted by explaining and justifying "why the trade secrets and interests endanger the company".6

If a shareholder could not obtain information since his request for information or inspection have remained unanswered or denied or delayed unjustly, he may apply to the commercial court of the company's domicile, within 10 (ten) days after the denial or, in other circumstances, within a reasonable time. In practice, as a result of the transformation of companies into an aggregate corporation and go public, the scope of disclosure requirement expanded while the scope of shareholders’ right to information was narrowed.

Along with the principle of public disclosure, it is not possible to disclose any information that the shareholder wishes to reach. In this context, information which is only related to the interests of the shareholder and which is not included in the scope of public disclosure is acquired by the shareholder under the name of right to information and right to inspection.

Therefore, the right to information set out in Article 437 of the TCC and the principle of public disclosure are similar. Both the right to information and the principle of public disclosure provide information to the shareholder about the activities, operation and economic status of the partnership. However, instead of providing information flow to the shareholders, the principle of public disclosure provides information flow to a group of current and potential shareholders, employees and government.

There are also some differences between the principle of public disclosure and the right to information in terms of the interest it is intended to protect. For example, the principle of public disclosure aims to protect the future shareholders against fraudulent and bad intention, while preserving the interests of the current shareholder, ensuring the balance of in-partnership interests and thus protecting minority interest shareholders. 7


With the Communiqué on the Amendment to the Communiqué on Principles Regarding Financial Reporting in the Capital Market (II-14.1.a) ("Communiqué") which was published in the Official Gazette dated 03.02.2017 and numbered 29968, certain criteria have been introduced regarding the disclosures of financial statements and reports of companies. Pursuant to the Communiqué, the Company’s annual financial statements and reports, annual activity reports and audit reports of the Board of Directors are announced by the Company on both the Public Disclosure Platform ("PDP") and the Company’s own website. Pursuant to Article 5 of the Communiqué, annual financial statements shall be prepared by companies based on the TAS / TFSR issued by the Public Oversight, Accounting and Auditing Standards Authority ("POAASA"). In addition, Article 64 of the TCC provides for the preparation of annual financial statements. In this context, in publicly-held joint stock companies, an obligation has been imposed on both preparing financial statements in accordance with TAS and preparing commercial books and records in accordance with TCC.

Preparation of financial statements in the group of companies

Consolidated Financial Statements are described in Article 4 of the Communiqué on Turkey Financial Reporting Standards According to this article, if the parent is a subsidiary of another parent, there is no need to prepare consolidated financial statements. In addition, the consolidated financial statements of the parent companies, individual financial statements are required to prepare.

Annual and interim financial reports:

Since the information to be shared in the annual financial report shall belong to the previous period, an interim financial report is required for investors to obtain more up-to-date information. Pursuant to Article 7 of the Communiqué, interim financial reports are obliged to issue interim financial reports for the capital market instruments issued on the stock exchange, investment companies, portfolio management companies, mortgage financing institutions and leasing companies.

Annual and interim activity reports of the Board of Directors:

Pursuant to Article 8 of the Communiqué, the limits of authority of the members of the board of directors and senior executives, term of office, collective bargaining, rights and benefits provided to personnel and workers, the sectors in which the entity operates, sales amounts, general explanations on prices, productivity rates and reasons for significant changes in these compared to previous years, incentives, changes in the articles of association during the period, compliance reports, mandatory information to be submitted to the shareholders and other issues that are not included in the financial statements but shall be included in the report.

The Board of Directors who prepare an annual activity report, prepare an interim activity report for 3-month interim periods. If the financial information to be disclosed in the interim report is a trade secret, such information shall not be included in the report. However, once the trade secret nature has disappeared, this information should be included in the report.

Audit reports:

Companies listed on the stock exchange shall disclose audit reports together with financial reports to the public. Pursuant to Article 394 of the TCC, the enterprises and mutual funds and asset financing funds determined by the decision of the Council of Ministers are obliged to subject their annual financial reports to independent audit. Companies which are not traded on the stock exchange but are listed under the CML are subject to independent audit. In order to be subject to auditing of listed companies, total assets: TL 15,000,000 (fifteen million), annual net sales revenue of TL 29,000,000 (twenty-twenty million), and number of employees of 50 (fifty) must exceed at least two criteria.

Pursuant to Article 9 of the Communiqué, the entity and its board members are responsible for the preparation and accuracy of the tables and reports described above. The statements of responsibility of the members of the board of directors and the general manager or managers are disclosed to the public together with the annual and interim activity reports. Enterprise whose capital market instruments are traded in the stock market or in other market places are obliged to disclose the above-mentioned reports to the public within 60 (sixty) days following the end of the accounting periods and to the public within 70 (seventy) days when there is no obligation to prepare financial statements.

Stay out of these enterprises are obliged to disclose their annual financial reports to the public three weeks before the date of the general assembly and in any case until the end of the third month following the end of the relevant accounting period.

Within this period, the reports are sent to PDP by the enterprises. After the financial reports are disclosed to the public, the companies publish the reports on their websites and keep the reports on the website for 5 years.


As regards disclosure of material events to the public, the CML differentiated between companies whose shares are traded and not traded. As a matter of fact, pursuant to Article 2 of the Communiqué on Special Situations (II-15.1) ("CSS"), the Company has been obliged to publicly disclose its special circumstances to publicly traded companies whose shares are traded on the stock exchange. According to Article 16 of CML, companies whose shares are traded on stock Exchange and joint stock companies whose shareholder number is over 500 (fivehundred) are deemed to be a publicly held company.

The information to be disclosed to the public should be insider information. According to Article 4 of the CSS, insider information is defined as information that may affect the value, price or investment decisions of the capital market instruments but not yet disclosed to the public.

At the same time, this information needs to be specific and precise.8 In this context, it is required that the impact of investors on investment decisions is sufficiently specific to assess. 9 Otherwise, the uncertainty of the information acquired by investors shall affect their investment decisions and weaken the confidence in the capital market. Another criterion is that insider information is not disclosed to the public. Information disclosed to the public loses the quality of insider information and becomes the information that the investor takes into account when making an investment decision. In order for the insider information to be disclosed to the public in our country, it must be published in PDP. Partnerships do not get rid of these obligations by claiming that they have disclosed the information to the public by means of a press release or their own web sites outside the PDP.

For example, a partnership operating in an industrial sector is obliged to inform the PDP immediately of this special event after it wins the tender. A press release by the CEO of the Company in this respect does not mean that the information is disclosed to the public. Another important element in terms of insider information is that the disclosure of the information to the public is expected to have an impact on the investment decision of the reasonable investor and have a potential impact on the value of the capital market instrument.

There is no explicit criterion for price effect in Turkish Law and it is evaluated according to every concrete case. For example, the fact that a mining company has a new mineral deposit or that a company is included in another company is considered as information that may affect the price. In terms of the obligation to public disclosures the changes that directly affect the company activities, financial structure, financial fixed assets such as financial assets and the damages of the company assets as a result of natural disasters should be disclosed to the public.

Unless otherwise in CSS, material event disclosures shall be announced to the Public Disclosure Platform at the latest until the 3 (third) working day following the date when the situation arises. Pursuant to Article 24 of the CSS, the issuers are required to announce the insider information disclosed to the public on their website at the latest within the working day after the public disclosure and keep this disclosure on their website for 5 years. Pursuant to Article 5 of the CSS, the decision of the board of directors regarding the date, place and agenda of the general assembly meeting, the decision of the board of directors or the general assembly regarding the distribution of profit, the exercise of the right to acquire new shares, and the decisions of the board of directors regarding the capital increase shall be announced to the public.


The responsibility arising from the wrong, misleading or incomplete information in the public disclosure documents is the responsibility arising from tort. For this reason, it is necessary to identify the elements of tort that are regulated in Article 49 of the Turkish Code of Obligations ("TCO").

This loss must occur in the assets of investors. In addition, according to Article 32, paragraph 5 of the CML, there must be a causal relation between unlawful information disclosed to the public and the investor’s decision.

Pursuant to Article 112 of the CML, it has been found that those issuing financial statements and reports in a non-reflective manner and members of the board of directors have committed the crime of fraud of special document pursuant to Article 207 of the Turkish Criminal Law ("TCL"). In addition, it is regulated that persons who prevent the Capital Markets Board from performing their duties will be punished from 6 months to 2 years according to Article 111 of the CML.


With the principle of public disclosure, it is aimed that publicly-traded companies, whose shares are traded on the stock exchange, disclose general and private information to the public, thereby protecting the small investor trading in the securities market and bringing the small savings owners into the economy with equal information.

Thanks to the public disclosure obligation, the capital market is ensured to be reliable, equal and fair. The investor who thinks that the financial statements of the companies and the public disclosure of special circumstances may affect the future of his investment may divest his share in the company through the stock exchange and turn to capital market instruments.


1 İhtiyar, Mustafa, P. 95.

2 Ferrell, Allen, The Case of Mandotory Disclosure in Securities Regulation Around the World, Harvard John M. Olin Discussion Paper Series, Discussion Paper No.492, Hardvard Law School, 09/2004, P. 13 ff.

3 Dolu, Murat, P. 62, ff. Kaya, Arslan, P. 72, ff. Poroy, Tekinalp, Çamoğlu, P. 648, ff. The Nullity of Board Decision Within the Scope of Protection of Shareholder Rights, Ankara 2015, P. 179.

4 The Article 514 of Turkish Commercial Code No: 6102.

5 Pulaşlı, Hasan , Caution, P. 1484 ff.

6 Pulaşlı, Hasan, Caution, P. 1496 ff., Dolu, Murat, P. 124 ff.

7 Kaya, Arslan, P. 31.

8 Hansen, Jesper Lau, Say When: When Must an Issuer Disclose Inside Information? 19.09.2016, Nordic & Europen Company Law Working Paper No.16-03; University of Copenhagen Faculty of Law Research Paper No:2016-28.

9 CSS P. 4

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions