A company has substantial cash.

It also has shareholders, creditors and an operating business.

Then one shareholder—usually a controlling shareholder who also manages the company—begins transferring money to another company that he or she owns or controls.

The transfers may be described in the accounting records as:

• loans;
• advances;
• consultancy payments;
• service fees;
• management charges;
• intercompany receivables;
• deposits;
• asset purchases; or
• payments under vaguely drafted commercial agreements.

But there may be no genuine commercial reason for the payments.

The second company may provide no real service.

No reasonable interest may be charged.

The money may never be repaid.

And after the transfers, the original company may no longer have sufficient assets to pay minority shareholders, suppliers, employees, banks or other creditors.

The controlling shareholder may then argue:

“The payment was made between two companies. It has nothing to do with me personally.”

Turkish law does not necessarily accept that conclusion.

Where company funds are transferred for the purpose of benefiting a shareholder or another company under that shareholder’s control, several different legal consequences may arise depending on the facts.

Potential remedies include:

director or manager liability under the Turkish Commercial Code,

claims for compensation to the company,

liability arising from unlawful use of control within a group of companies,

avoidance actions by creditors,

criminal liability for breach of trust in appropriate cases,

tax consequences arising from transfer pricing and disguised profit distribution,

and, where urgency exists,

interim measures intended to preserve the transferred assets.

The most important practical point is therefore:

Company money does not become the shareholder’s money merely because the shareholder controls the company.

1. Start With the Most Important Distinction: Is the Person Merely a Shareholder or Also a Manager?

A shareholder and a company are separate legal persons.

Ownership of 70%, 90% or even 100% of a company’s shares does not mean that the shareholder personally owns the company’s bank account.

The funds belong to the company.

Therefore, the legal analysis begins by identifying the role of the person responsible for the transfer.

Was that person:

• merely a shareholder;
• a director of an A.Ş.;
• a manager of a limited company;
• an authorised signatory;
• a de facto manager;
• or a person exercising control through another company?

This distinction matters because Turkish Commercial Code (“TCC” or “TTK”) liability provisions principally target founders, directors, managers and other persons who breach corporate duties.

Article 553 TCC provides that founders, board members, managers and liquidators who breach obligations arising from the law or articles of association may be responsible for the damage they cause to the company, shareholders and creditors, subject to the statutory liability framework.

Therefore, a shareholder who merely receives information about a transaction is not automatically in the same legal position as the manager who ordered the payment.

But where the shareholder is also the person exercising management authority, the potential exposure changes dramatically.

2. Limited Company Managers Have a Duty to Protect the Company’s Interests

The issue is especially common in Turkish limited liability companies.

Article 626 TCC requires managers and persons entrusted with management to perform their duties with due care and to protect the company’s interests in accordance with the principle of good faith.

The provision also expressly subjects managers to duties of loyalty.

Consider a limited company owned by two shareholders:

Shareholder A: 70%

Shareholder B: 30%

A is also the sole manager.

A establishes another company owned entirely by himself.

He then causes the first company to transfer TRY 20 million to the second company without commercially reasonable consideration.

If the second company does not provide equivalent value to the first company, the question is not merely:

“Was A legally authorised to sign the bank transfer?”

The more important question is:

“Did A exercise that authority in the interest of the company or use corporate authority to benefit himself and another business under his control?”

Corporate representation authority does not eliminate the manager’s duty of loyalty.

3. A Legally Authorised Transaction Can Still Create Manager Liability

This distinction is fundamental.

Suppose the manager has unlimited signature authority.

The bank transfer may therefore be formally valid.

That does not necessarily mean that the manager has fulfilled his duties toward the company.

For example:

Target Company transfers TRY 10 million to RelatedCo.

The payment is described as:

“Commercial loan.”

But:

• there is no loan agreement;
• no security is obtained;
• no interest is charged;
• RelatedCo has weak financial capacity;
• repayment is never requested;
• both companies are controlled by the same shareholder; and
• Target Company subsequently struggles to meet its own debts.

The issue becomes whether a reasonably diligent and loyal manager acting in the company’s interests would have entered into the same transaction.

Where the answer is no and company loss results, the formal validity of the banking transaction does not necessarily protect the manager from a TCC liability action.

4. Yargıtay Has Directly Examined Unlawful Transfers of Company Funds

A significant Court of Cassation decision demonstrates the practical importance of this issue.

In Yargıtay 11th Civil Chamber, E. 2019/2899, K. 2020/1147, dated 10 February 2020, the claimant alleged that former directors and supervisors had caused company resources to be transferred improperly to companies belonging to the same corporate group and had directed company resources into economically harmful transactions.

The Court of Cassation held that the fact that the relevant group companies later came under the control of the same public authority did not automatically eliminate the loss previously caused to the company.

The Court ordered examination of the allegedly improper fund transfers and required the actual economic loss resulting from the transactions to be determined. It also emphasized that, where shares had been acquired at an excessive price, the company’s loss should be determined by comparing the acquisition price with the real market value of the shares rather than automatically treating the entire payment as loss.

The case establishes an important principle for related-party transfers:

Courts should examine economic substance.

The question is not only how much money left the company’s bank account.

The court should determine:

What did the company receive in return?

5. The Company Can Sue the Responsible Manager

Where a fund transfer causes damage to the company, the most direct claimant is normally the company itself.

Suppose a manager transferred:

TRY 25 million

to another company.

The other company genuinely provided services worth only:

TRY 5 million.

The company’s economic loss may potentially be:

TRY 20 million,

subject to expert examination and the particular circumstances.

The company may seek compensation from the responsible directors or managers under the TCC liability regime.

This becomes more complicated where the wrongdoer still controls the company’s management.

The manager who caused the loss is unlikely to instruct the company to sue himself.

Turkish company law therefore provides another important mechanism.

6. A Minority Shareholder Can Bring an Action for the Company’s Loss

Article 555 TCC provides that both the company and each shareholder may seek compensation for damage suffered by the company.

However, where the action is brought by a shareholder for company loss, the shareholder must normally request that the compensation be paid to the company, not personally to the shareholder.

This distinction is extremely important.

Suppose:

Company value before diversion: TRY 100 million.

Controlling manager diverts: TRY 30 million.

Minority shareholder owns: 20%.

The minority shareholder cannot automatically say:

“Twenty percent of TRY 30 million is TRY 6 million. Pay TRY 6 million directly to me.”

The immediate loss was suffered by the company.

The correct TCC structure may therefore require the minority shareholder to seek:

TRY 30 million compensation to be returned to the company.

Once the money is restored to the company, the value of the shareholder’s participation is indirectly protected.

7. The Same Liability Framework Also Applies to Limited Companies

The TCC expressly extends the relevant director-liability provisions to limited liability companies.

Article 644 refers, among other provisions, to Article 553 and the related liability rules governing claims, joint responsibility, discharge and limitation periods.

Accordingly, the fact that the company is an Ltd. Şti. rather than an A.Ş. does not make managers free to move company resources to another business for personal purposes.

For limited companies, the analysis commonly combines:

Article 626 — duty of care and loyalty

with

Articles 553 et seq. — liability for company loss.

8. The Claim Should Identify the Company’s Actual Loss

A common litigation mistake is treating every payment to a related company as automatically equal to the company’s loss.

That is not necessarily correct.

Suppose Company A pays Company B:

TRY 15 million

for machinery.

If the machinery was genuinely worth TRY 15 million, there may be no economic loss merely because both companies are controlled by the same shareholder.

If the machinery was worth only TRY 5 million, however, the potential loss becomes approximately:

TRY 10 million.

Likewise, if Company A lends TRY 20 million to Company B and later receives the entire principal plus market-rate interest, the transaction may be commercially defensible.

The legal analysis becomes very different if:

• no repayment occurs;
• no interest is charged;
• no security exists;
• Company B was already insolvent;
• or the transaction had no rational benefit for Company A.

This is why forensic accounting is often essential.

9. “Related Company” Does Not Automatically Mean “Illegal Transaction”

Corporate groups routinely move funds between companies.

There may be legitimate reasons for:

• intra-group loans;
• cash-pooling arrangements;
• shared-service agreements;
• group purchasing;
• management services;
• cost allocations;
• financing;
• trademark licences; and
• intercompany asset transfers.

The existence of common shareholders does not automatically make the transaction unlawful.

The real questions are:

Was there a genuine commercial purpose?

Was the transaction documented?

Was equivalent consideration received?

Were the terms comparable to market conditions?

Was repayment realistically expected?

Did the transaction harm the transferring company?

Who ultimately benefited?

The creditor or minority shareholder should focus on these questions rather than simply stating that the companies were related.

10. Company Group Rules Can Create an Additional Cause of Action

The situation becomes particularly serious where one company controls another company within the meaning of the Turkish Commercial Code.

Article 202 TCC expressly prohibits a controlling company from exercising its control in a manner that causes loss to a subsidiary.

The statute specifically lists conduct such as causing the subsidiary to:

• transfer business;
• transfer assets;
• transfer funds;
• transfer personnel;
• transfer receivables or debts;
• reduce or transfer profits;
• provide guarantees;
• make payments; or
• take other steps that damage its economic position,

unless the resulting loss is properly compensated within the statutory framework.

The explicit inclusion of fund transfers is especially important.

11. Example: The Profitable Company Finances the Shareholder’s Other Business

Assume Holding A.Ş. controls:

ProfitableCo A.Ş.

and

NewVenture A.Ş.

NewVenture has no meaningful revenue.

Holding causes ProfitableCo to transfer:

TRY 100 million

to NewVenture interest-free.

The transaction provides no reasonable commercial benefit to ProfitableCo and creates serious liquidity problems.

Article 202 can become directly relevant.

The TCC requires losses caused through unlawful exercise of control to be compensated in the relevant financial year or for an equivalent enforceable claim to be granted within the statutory period.

A corporate group does not operate under the principle:

“All group money belongs to the same owner anyway.”

Each company remains a separate legal person with its own assets, shareholders and creditors.

12. Minority Shareholders Can Act Against Unlawful Group Transfers

If the loss caused through unlawful control is not properly compensated, Article 202 gives shareholders important remedies.

The statute allows shareholders of the dependent company to seek compensation for the company’s loss from the controlling company and the directors responsible for causing the loss.

In appropriate circumstances, the court may also adopt alternative solutions permitted under the provision.

This remedy can be particularly powerful where the majority shareholder argues:

“The board did not make the decision independently. The parent company required the transfer.”

That explanation may establish the very type of control relationship that Article 202 is designed to regulate.

13. Creditors Can Also Have Rights Under the Company Group Provisions

Article 202 is not only a shareholder-protection provision.

The TCC expressly permits creditors, even without bankruptcy of the dependent company, to seek payment of the company’s loss to the company under the statutory conditions arising from unlawful exercise of control.

This creates an important alternative where a creditor can demonstrate that a controlling company deliberately caused the debtor company to transfer funds away and thereby weakened the creditor’s economic position.

For example:

DebtorCo owes Supplier TRY 30 million.

ParentCo causes DebtorCo to transfer TRY 80 million to SisterCo.

DebtorCo becomes unable to pay Supplier.

If the statutory company-group relationship and Article 202 conditions exist, the analysis need not be limited to ordinary enforcement against the now-empty debtor company.

14. If the Purpose Was to Defeat Creditors, Tasarrufun İptali May Also Become Relevant

Where the company already had creditors and money was transferred to another company with the intention of keeping assets away from enforcement, the Enforcement and Bankruptcy Law must also be examined.

Articles 277 et seq. EBL permit qualifying creditors to challenge dispositions made to prejudice creditors.

Article 280 is particularly important where:

• the debtor does not have sufficient assets to satisfy creditors;
• the transaction was intended to cause creditor prejudice; and
• the transferee knew or should have known of the debtor’s position and intention.

Yargıtay consistently describes these actions as mechanisms allowing creditors to pursue assets transferred through prejudicial transactions.

If the recipient company is controlled by the same shareholder, proving knowledge of the debtor’s financial condition may become significantly easier than in an arm’s-length transaction.

15. Money Transfers Can Be Challenged—Not Only Real Estate Transfers

Tasarrufun iptali litigation is frequently associated with apartments, land and vehicles.

But the concept of a disposition is broader.

A creditor should also investigate:

• cash payments;
• transfers of receivables;
• debt assumptions;
• guarantees;
• debt repayments benefiting selected related parties;
• sham service payments;
• and other transactions that economically remove value from the debtor’s estate.

If the transferred asset itself has subsequently disappeared, the statutory framework may in appropriate circumstances allow the claim to be converted into a monetary claim against the transferee up to the legally relevant value.

Yargıtay practice recognises the possibility of pursuing the value where the third party has subsequently disposed of the transferred property.

16. Example: The Company Transfers Cash Immediately Before Enforcement

Assume:

Supplier has a TRY 15 million receivable from Debtor Ltd.

The debt has already arisen.

Debtor Ltd. has TRY 20 million in its bank account.

Its controlling shareholder owns another company, RelatedCo Ltd.

After receiving a formal demand from Supplier, Debtor Ltd. transfers:

TRY 18 million

to RelatedCo.

The accounting explanation states:

“Advance payment for future consultancy services.”

But:

• there is no meaningful consultancy agreement;
• RelatedCo has no employees capable of providing the service;
• no service is later performed;
• RelatedCo is owned by the same controlling shareholder;
• and Debtor Ltd. is left almost without assets.

This fact pattern may support several parallel arguments:

Manager liability:
The manager may have breached duties owed to Debtor Ltd.

Company-group liability:
If statutory control exists, Article 202 may apply.

Creditor avoidance:
The transfer may be attacked under Articles 277 et seq. EBL.

Criminal investigation:
Depending on intent, authority and the precise facts, breach of trust may require examination.

Tax investigation:
The payment may also produce related-party transfer-pricing consequences.

A strong legal strategy should not prematurely choose only one theory.

17. Criminal Liability: Breach of Trust May Be Relevant

Civil liability and criminal liability must be distinguished carefully.

Not every commercially unsuccessful decision constitutes a crime.

A manager is allowed to take genuine commercial risks.

But the analysis changes where a person who has authority to manage another legal person’s assets intentionally uses those assets for his own or another person’s benefit contrary to the purpose for which the assets were entrusted.

Article 155 of the Turkish Criminal Code regulates breach of trust (güveni kötüye kullanma).

Where the offence is committed through a commercial, service or professional relationship, or through authority to manage another person’s property, Article 155/2 provides the aggravated form of the offence. The current text provides imprisonment from one to seven years and a judicial fine of up to three thousand days for that form.

This provision can become relevant where company resources entrusted to a manager are intentionally diverted for another person’s benefit.

18. But a Criminal Complaint Should Not Be Based Merely on a Corporate Disagreement

This distinction is important.

Suppose a manager invests company money in a new project after obtaining commercial advice.

The investment later fails.

That does not automatically mean that the manager committed breach of trust.

Criminal responsibility requires examination of elements such as:

• authority over the property;
• purpose of entrustment;
• conduct outside that purpose;
• personal or third-party benefit;
• intention;
• and the precise factual relationship between the accused and the assets.

Yargıtay has applied Article 155/2 where property entrusted through a service or commercial relationship was intentionally disposed of outside the purpose for which it was entrusted.

Accordingly, criminal complaints should identify the actual diversion mechanism rather than merely alleging:

“The company lost money.”

19. The Most Powerful Evidence Is Usually the Bank Trail

These cases are fundamentally financial.

A lawyer should reconstruct the complete movement of money.

For each transfer, determine:

Date

Amount

Sender account

Recipient account

Recipient company

Shareholders of recipient company

Transfer description

Contractual basis

Invoice

Board or manager decision

Service allegedly received

Repayment

Interest

Security

Ultimate destination of funds

A single bank statement may raise suspicion.

A complete financial chain can prove the case.

20. Follow the Money Beyond the Second Company

The investigation should not end when the money reaches RelatedCo.

Suppose:

Company A → TRY 20 million → Company B.

Then, one day later:

Company B → TRY 18 million → Shareholder’s personal account.

Or:

Company B → TRY 18 million → Shareholder’s spouse.

Or:

Company B → TRY 18 million → purchase of real estate used personally by the shareholder.

The second stage may demonstrate that Company B was merely an intermediary.

A forensic investigation should therefore examine what happened after the transfer.

The real economic beneficiary may be more important than the nominal first recipient.

21. Examine Whether the Recipient Company Actually Performed Anything

Fraudulent or abusive transfers are frequently disguised as service agreements.

Common descriptions include:

• consultancy;
• software services;
• management fees;
• marketing services;
• business development;
• licensing;
• commission;
• project consultancy; or
• technical support.

The investigator should ask:

Where is the contract?

Where are the reports?

Who performed the work?

How many employees does the recipient have?

Why was this company selected?

How was the fee calculated?

Was the fee market-based?

Was the same service already being performed internally?

A TRY 10 million “consultancy fee” paid to a company with no employees, no office and no deliverables requires explanation.

22. Related-Party Transactions Also Have Tax Consequences

The same transfer may create a separate tax problem.

Article 13 of the Corporate Tax Law regulates transfer pricing through disguised profit distribution.

Where a company enters into transactions with related parties at prices inconsistent with the arm’s-length principle, the resulting profit may be treated as having been distributed through transfer pricing.

The concept of related party expressly includes shareholders and entities directly or indirectly connected to the company or its shareholders through management, supervision, capital or influence. The rules also cover lending and borrowing transactions.

Therefore, an interest-free or artificially priced transfer to a shareholder-controlled company can potentially produce:

• corporate tax adjustments;
• disguised profit distribution consequences;
• VAT issues in relevant cases;
• tax penalties; and
• interest.

A transaction intended to extract value from the company may therefore create both private-law and tax exposure.

23. An “Interest-Free Loan” Is Not Automatically Safe

A common defence is:

“We did not give the money away. It is a receivable from the other company.”

The balance sheet may indeed show:

Receivable from RelatedCo: TRY 30 million.

But the existence of an accounting entry does not answer the economic question.

The court or expert should ask:

• Can RelatedCo repay TRY 30 million?
• Was there a maturity date?
• Was security obtained?
• Was interest charged?
• Was interest collected?
• Has any principal been repaid?
• Why was the loan commercially necessary?
• Would the company have lent the same amount to an unrelated business on the same terms?

A nominal receivable that has no realistic prospect of collection may not be economically equivalent to TRY 30 million in cash.

24. Accounting Records Cannot Legitimize a Sham Transaction

Another common misconception is:

“It is recorded in the books, therefore the transfer is lawful.”

Company books are evidence.

They are not a legal immunity mechanism.

An unlawful transfer may be carefully recorded.

An invoice may exist.

A contract may exist.

A board resolution may exist.

The litigation should examine whether the documents correspond to economic reality.

Yargıtay’s fund-transfer jurisprudence requires courts to determine the actual economic consequences of related-company transactions rather than merely stopping at their accounting form.

25. What If the Majority Shareholder Approved the Transfer at the General Meeting?

Majority control does not necessarily cure a transaction contrary to mandatory corporate-law rules or duties.

The principle:

“I own 80%, therefore I can vote to move company money wherever I want”

is legally incorrect.

The company remains a separate legal person.

Corporate powers must be exercised for legally permissible purposes.

Depending on the company type and the particular resolution, a minority shareholder may also need to analyse:

• annulment of general meeting resolutions;
• nullity;
• invalidity of management decisions;
• and liability of those implementing the transaction.

The proper action depends on whether the transfer arose from a general meeting resolution, board resolution, manager decision or unauthorised act.

26. Discharge Does Not Always Solve the Manager’s Problem

Managers sometimes argue:

“The general meeting discharged me, therefore nobody can sue.”

Article 558 TCC regulates the effect of discharge.

A discharge resolution can affect company and shareholder claims concerning the material facts actually covered by the discharge, but the legal effect depends on who voted, what was disclosed and when the claim is brought.

The statute also provides a specific six-month period affecting the rights of shareholders who did not vote in favour of the discharge in the circumstances regulated by Article 558.

For that reason, shareholders reviewing suspicious transfers should carefully examine:

• the content of annual reports;
• financial statements;
• general meeting minutes; and
• discharge resolutions.

A generic approval should not be assumed to resolve every undisclosed related-party transaction.

27. Limitation Periods Must Be Checked Early

Article 560 TCC provides, as a general rule, that compensation claims against responsible persons become time-barred:

two years after the claimant learns of the damage and responsible person,

and in any event

five years after the act causing the damage.

Where the conduct also constitutes a criminal offence subject to a longer criminal limitation period, the longer period may apply to the compensation claim under the statutory conditions.

Therefore, the date on which the suspicious transfer occurred must be identified immediately.

Corporate litigation should not be delayed simply because the shareholders are still negotiating informally.

28. What If the Company Is Already Bankrupt?

The standing rules change when the damaged company enters bankruptcy.

Article 556 TCC provides that claims concerning the company’s loss are initially exercised by the bankruptcy administration.

If the bankruptcy administration does not pursue the claim, shareholders and company creditors may bring the action under the statutory framework.

This can be highly important in an asset-stripping scenario.

Consider:

Manager transfers TRY 50 million from Company A to his other company.

Company A subsequently becomes bankrupt.

The manager should not necessarily be able to eliminate responsibility merely because the company no longer has functioning management capable of suing him.

29. The Recipient Company May Also Become a Defendant Under Other Legal Theories

A responsibility action against the manager is only one part of the case.

The company or creditor should also ask:

Can the money itself be recovered from the recipient company?

Depending on the transaction, possible legal theories may include:

• contractual repayment;
• unjust enrichment;
• invalidity or simulation;
• avoidance under enforcement law;
• company-group liability;
• restitution of an unlawful payment; and
• other remedies arising from the particular transaction.

The correct basis depends on how the transfer was structured.

A TRY 20 million sham service payment is legally different from a genuine loan whose maturity has expired.

30. Interim Protection Can Be More Important Than the Final Judgment

Suppose the investigator discovers that TRY 30 million was transferred to RelatedCo yesterday.

RelatedCo is preparing to transfer the money abroad tomorrow.

A damages judgment obtained three years later may have little value.

Counsel should therefore immediately consider whether the facts permit:

• precautionary attachment;
• precautionary injunction;
• preservation of specific receivables;
• attachment in enforcement proceedings; or
• other statutory interim measures.

The appropriate mechanism depends on the nature of the claim.

For a matured monetary claim, precautionary attachment may often be more relevant than attempting to use a generic injunction merely to secure future collection.

The application should identify concrete evidence showing why recovery would be jeopardised without immediate intervention.

31. A Practical Minority-Shareholder Investigation

A minority shareholder who suspects diversion of company funds should generally proceed systematically.

Step 1 — Identify the recipient companies

Obtain trade registry records and determine:

• shareholders;
• directors;
• addresses;
• establishment dates;
• group relationships; and
• family connections.

Step 2 — Obtain corporate records

Seek:

• general ledgers;
• bank records;
• related-party account statements;
• contracts;
• invoices;
• board decisions;
• manager resolutions;
• general meeting minutes;
• annual reports; and
• financial statements.

Step 3 — Calculate all related-party transfers

Do not analyse one transaction in isolation.

Prepare a schedule for several financial years.

Step 4 — Determine what the company received

Identify the actual economic consideration for each payment.

Step 5 — Trace repayments

A claimed loan should produce repayments or at least an enforceable receivable.

Step 6 — Determine the ultimate beneficiary

Follow funds beyond the first related company.

Step 7 — Obtain expert analysis

Accounting evidence may be insufficient without valuation, transfer-pricing or forensic review.

Step 8 — Select the proper legal action

Depending on the evidence:

• TCC manager liability;
• Article 202 company-group liability;
• resolution challenge;
• restitution;
• creditor avoidance;
• criminal complaint; or
• several coordinated proceedings.

32. A Practical Creditor Investigation

A creditor approaches the same facts from a different position.

The creditor should ask:

Did my claim arise before the transfer?

This can be critical for avoidance litigation.

Did the debtor company become unable to pay after the transfer?

The financial effect should be documented.

Is the recipient company related?

Common control is highly relevant evidence.

Was real consideration received?

A genuine commercial transaction is different from asset stripping.

Is the transferred money still traceable?

Speed may determine whether interim protection works.

Does Article 202 apply?

If the transfer arose within a statutory company group, direct group-company remedies may exist.

Has bankruptcy begun?

If so, TCC Article 556 and bankruptcy rules must also be examined.

33. A Detailed Example

Assume TechCo A.Ş. has:

Cash: TRY 80 million
Bank debt: TRY 20 million
Trade creditors: TRY 30 million

Its controlling shareholder owns 75% and is chairman of the board.

The same shareholder owns 100% of NewTech Ltd.

During a dispute with TechCo’s minority shareholders, the following transfers occur:

January: TRY 10 million “consultancy fee” to NewTech.

February: TRY 20 million interest-free loan to NewTech.

March: TRY 15 million advance for software development.

Total transfers:

TRY 45 million.

Investigation reveals:

• NewTech was incorporated only two months earlier;
• it has two employees;
• no consultancy report exists;
• no loan repayment has occurred;
• no loan security exists;
• no software has been delivered;
• and NewTech used part of the money to purchase property.

TechCo is now unable to pay suppliers.

This scenario may raise at least five separate legal questions.

1. Director Liability

Did the chairman breach his duties by causing TechCo to transfer funds without adequate value?

2. Minority Shareholder Action

Can the minority shareholders seek compensation to be paid back to TechCo under Article 555?

3. Company-Group Liability

If the statutory control requirements exist, did Article 202 prohibit the transfer of funds causing TechCo’s loss?

4. Creditor Remedies

Can suppliers challenge transfers made to keep assets away from creditors?

5. Criminal and Tax Consequences

Was company property intentionally used for another’s benefit, and were related-party transactions conducted on arm’s-length terms?

A well-designed case will separate these theories rather than mixing them into a single allegation of “fraud.”

34. The Defence Will Usually Say the Transfer Was Commercially Justified

The controlling shareholder will often respond:

“This was a legitimate group transaction.”

The claimant should therefore prepare for the commercial-judgment defence.

Relevant questions include:

• Was there a documented business plan?
• Was the transaction approved before or after the payment?
• Were alternatives considered?
• Was independent advice obtained?
• Was the price market-based?
• Did conflicted managers participate in the decision?
• Was the related-party relationship disclosed?
• Was the transaction profitable for the transferring company?
• Were comparable transactions conducted with unrelated third parties?

A transaction is easier to defend when the commercial rationale existed before the dispute, rather than being invented after litigation begins.

35. Evidence of Intent Is Often Found in Timing

Timing can be highly persuasive.

Consider the following sequence:

1 March: Creditor sends final demand.

4 March: Shareholders establish NewCo.

8 March: TRY 25 million transferred from debtor company to NewCo.

10 March: Creditor commences enforcement.

15 March: Debtor company’s bank account is almost empty.

Even where each document has a superficially commercial explanation, the chronology may strongly support the argument that the transaction was designed to defeat creditors.

The same logic applies in shareholder disputes.

A major transfer immediately after a minority shareholder requests inspection of company books deserves careful examination.

Conclusion: Control of a Company Is Not Ownership of Its Cash

The most important principle in disputes involving diverted company funds is deceptively simple:

The company’s money belongs to the company.

A controlling shareholder may have enormous voting power.

A manager may have unlimited signature authority.

A parent company may control the entire corporate group.

None of these circumstances automatically permits company resources to be transferred for the private economic benefit of another shareholder or related company.

Where a manager causes company funds to be transferred in breach of corporate duties, Articles 553 et seq. TCC can create compensation liability, and Article 555 allows shareholders to seek recovery of company loss for payment to the company.

In limited companies, the analysis is reinforced by Article 626, which expressly requires managers to exercise care and protect the company’s interests.

Where the transaction occurs within a statutory group of companies, Article 202 is even more explicit: a controlling company cannot use its dominance to force a subsidiary to transfer assets, funds, profits or other economic value causing uncompensated loss. Shareholders and, in appropriate circumstances, creditors can invoke the remedies provided by that regime.

If the objective was to prevent company creditors from reaching the money, Articles 277 et seq. EBL may also permit the transfer to be challenged.

Where the facts demonstrate intentional diversion of property entrusted through management authority, Article 155 of the Turkish Criminal Code may require separate examination.

And where the recipient is a shareholder-controlled related party, the transaction may additionally create transfer-pricing and disguised profit distribution exposure under Article 13 of the Corporate Tax Law.

For practitioners, the decisive investigation should therefore answer seven questions:

Who ordered the transfer?

Who received the money?

What did the company receive in return?

Was the transaction conducted on market terms?

Did the company suffer a measurable loss?

Who ultimately benefited from the money?

Was the transfer a genuine commercial transaction—or a mechanism for moving wealth outside the reach of shareholders and creditors?

Once those questions are answered with bank records, accounting evidence and corporate documents, a transaction described as an ordinary “intercompany payment” may look very different.

Follow the money, identify the beneficiary, and calculate what the company lost.