Article 438 of the Turkish Commercial Code outlines the right of shareholders in joint-stock companies to request a special audit. This article explores the nature of the special audit request, its legal requirements, the court process, and details of the decisions involved.
A. Nature of the Right to Request Special Audit
According to the Turkish Commercial Code (TCC), the right to request a special audit is defined as a significant shareholder right in joint-stock companies. A shareholder must first exercise their right to obtain information or conduct an examination and demonstrate that this request is necessary for the exercise of other shareholder rights. The special audit request stems from shareholders' efforts to oversee company management and gain accurate insights into company activities.
B. Legal Requirements for Special Audit Request
Under Article 438/1 of the TCC, a shareholder can request the appointment of a special auditor from the general assembly if they have previously exercised their right to obtain information or conduct an examination. Additionally, they must prove that this request is essential for the exercise of other shareholder rights. These conditions legitimize the shareholder's request for a special audit and provide legal protection.
C. Timeframe for Requesting a Special Auditor from the Court
According to Article 439/1 of the TCC, if the general assembly rejects the request for a special audit, shareholders holding at least one-tenth of the capital or in publicly traded joint-stock companies, one-twentieth of it, can request the appointment of a special auditor from the commercial court within three months. This period begins from the date the general assembly rejected the special audit request, and the competent court is where the company's headquarters are located.
D. Burden of Proof
Under Article 439/2 of the TCC, for the court to appoint a special auditor, it must be convincingly demonstrated that the management board violated the law or the articles of association, causing harm to the partnership or shareholders. The court applies this condition to prevent the misuse of the special audit request and evaluates the legal basis of the request.
E. Scope of Special Audit
According to Article 438 of the TCC, the request for a special audit is limited to specific, concrete incidents and typically involves internal company matters. The request to appoint a special auditor focuses on specific situations that raise doubts about company management or specific activities.
F. Principles of Court Examination
Under Article 440 of the TCC, before deciding on appointing a special auditor, the court hears both the defendant company and the requesting shareholders. The court evaluates legal and factual elements to determine the legitimacy of the special audit request. This process is conducted meticulously to ensure justice and protect shareholder rights.
G. Court Costs
According to Article 444/1 of the TCC, specific conditions apply regarding the court costs of appointing a special auditor. In special circumstances, these costs may be partially or fully borne by the requesting parties or the company. The court determines the costs based on the honesty and legitimacy of the request.
This article under Article 438 of the Turkish Commercial Code provides a detailed examination of the right of shareholders in joint-stock companies to request a special audit and the legal processes required for its exercise.
H. Implementation of the Special Audit Decision
According to Article 441 of the TCC, if the court decides to appoint a special auditor, the assigned auditor's authority and duties are defined. The special auditor examines specific activities, management bodies, or financial situations of the company within the timeframe specified by the court and submits a report. This report is crucial for protecting shareholders' rights and ensuring transparency.
CONCLUSION
Article 438 of the Turkish Commercial Code regulates the significant shareholder right of requesting a special audit in joint-stock companies. Specific legal requirements and processes must be met for shareholders to exercise this right. By utilizing their right to obtain information or conduct an examination, shareholders can request the appointment of a special auditor from the general assembly. The special audit request is used when doubts arise about company management or specific activities, and the court process ensures fairness and protects shareholder rights. In this framework, the regulation on the right to request a special audit in the TCC strengthens shareholders' oversight of company management and their ability to ensure transparency.
