GENERAL ASSEMBLY OF JOINT STOCK COMPANIES TO BE HELD VIA ELECTRONIC MEANS 21 March 2024

In joint-stock companies, the general assembly is where shareholders with voting rights or their representatives declare their intentions, exercise their rights related to the company, and receive information. The general assembly can be convened either physically at a specified time and location or electronically. The regulations for electronic general assemblies are outlined in Article 1527 of the Turkish Commercial Code No. 6102 ("TCC") and Article 30 of the Capital Markets Law No. 6362 ("CML"). According to Article 1527/5 of the TCC, “Attending to the general assembly of joint stock companies via electronic means, giving opinion and voting result in all judicial conclusions of voting and attending physically”.

1. Rationale for the Adoption of General Assembly of Joint Stock Companies via Electronic Means

In Article 1527 of TCC, the legislator delineates the rationale for introducing electronic general assemblies as follows: "For joint-stock companies with shares traded on the stock exchange, the predominant challenge lies in the administrative gaps experienced within management. There may be inadequate participation from public shareholders in general assemblies. Online general assemblies will significantly contribute to addressing this challenge and will serve to enhance the transparency of management for publicly traded joint-stock companies.”

2. Legislation on General Assemblies via Electronic Means

The fundamental principles governing general assemblies conducted electronically are established in the Regulation about General Assembly of Joint Stock Companies to be held via Electronic Means (the "Regulation").

This Regulation delineates the procedures and principles concerning the general assembly of joint-stock companies via electronic means, including the submission of proposals, expression of views, and vote. Additionally, it incorporates a model provision related to electronic attendance and voting within the articles of association, stipulates the criteria for exercising voting rights by right holders or their proxies, elaborates on the operational modalities of the Electronic General Assembly System (the “system”), and defines the obligations incumbent upon its participants.

Article 5(1) of the Regulation contains a model provision about electronic participation and voting in general assemblies. Companies facilitating electronic participation and voting for right holders and their proxies must integrate this model provision into their articles of association without alteration. Furthermore, companies with such a stipulation in their articles of association must ensure that right holders and proxies can participate and vote electronically in each general assembly they convene.

According to Article 5 of the Regulation, the provision that must be included in the article of association of companies implementing the System is as follows:

“General Assembly via Electronic Means

Right holders with the right to attend the company's general assembly meetings may also participate electronically, as stipulated in Article 1527 of the Turkish Commercial Code. In accordance with the provisions of the Regulation about the General Assembly of Joint Stock Companies to be held via Electronic Means, the company can establish an electronic general assembly system. This system allows right holders to attend meetings electronically, express opinions, make proposals, and vote. Moreover, the company has the option to procure services from systems designed for this specific purpose. According to this provision of articles of association, the right holders, and their representatives could use their signified right indicated in aforesaid regulation provisions via this organized system for all general assembly meetings”

3. Ensuring Access to Information and Documents Related to the General Assembly

According to Article 6 of the Regulation, companies that implement the system of the general assembly via electronic means are required to ensure that the mandatory notifications for general assembly meetings, as stipulated by TCC and the articles of association, are made available to right holders for examination within the specified periods. Additionally, these companies must have documents related to the general assembly agenda securely prepared with electronic signatures and ready for right holders' access through the System.

4. Declaration of Attending to the General Assembly via Electronic Means

Right holders who intend to participate in the general assembly electronically, either personally or through their representatives, must declare their preference to the System. If a representative will attend on behalf of the right holders, it is obligatory to register the representative's identification details with the System. When appointing a representative, a right holder may grant general authority or authorize them separately for each agenda item. An individual exercising their participation rights as a representative vote in alignment with the instructions of the right holder they represent. Right holders have the option to alter their preferences and can withdraw them from the System. However, a right holder or their representative who does not retract their electronic participation request cannot physically attend the general assembly meeting.

5. Participation in the General Assembly Meeting via Electronic Means

Participation in the general assembly through electronic means occurs when right holders or their representatives access the System using secure electronic signatures. The list of shareholders and representatives intending to participate in the meeting electronically is obtained from the System before the meeting commences.

6. Giving Opinion and Voting in General Assembly held via Electronic Means

The right holder or their representative communicates their opinions electronically during the general assembly meeting they attend through electronic means. Once the meeting chair announces the commencement of voting on the respective agenda item, participants in the electronic meeting vote through the System. After each agenda item is announced by the chair for voting, it must be voted upon individually. Once a right holder or their representative has voted on a particular agenda item, they cannot change it.

The voting results are conveyed to the chairperson via the System. The chairperson records this outcome and, if applicable, any opposition statements sent electronically in the minutes.