Atty. Ecem Akyıldız
Together with Article 1527, entitled “Assemblies in the Electronic Environment” of the Turkish Commercial Code (TCC), the system of attendance to general assembly meetings in electronic environment and casting votes in these meetings via electronic environment has become mandatory for companies which are quoted on the stock exchange. With some of the shareholders residing abroad, in companies with a foreign capital in particular, there are significant difficulties to holding physical general assembly meetings, which are comprised of Turkish and / or foreign nationals, and it is not always possible to pass resolutions in the presence of the legally sought quorums. The holding of general assemblies in the electronic environment brings a solution to these problems.
The matter of participating and casting cotes in e-General Assembly is not compulsory for companies which are not quoted on the stock exchange, and has been left to the preferences of the companies. Together with this, as stipulated in Article 1527 of the TCC, the principles and procedures concerning participation, making proposals, stating opinions and casting votes in the general assemblies of joint stock companies, a copy of the articles of incorporation provision participation and casting votes in the electronic environment in general assemblies, the principles concerning the use of voting rights by their holders or the representatives thereof, the principles of operation of the Electronic General Assembly System (EGAS) and the obligations of the participants in this system, have been structured with the “Resolutions Concerning the General Assemblies of Joint Stock Companies, which are to be Held in the Electronic Environment” (EGAR), which was prepared by the Ministry for Customs and Trade (the Ministry) and published in the Official Gazette on 28.08.2012, entering into effect on 01.10.2012.
The Provision to be Placed in the Articles of Incorporation for e-General Assembly
Participation, making proposals and casting votes at general assemblies through the electronic meeting system will give rise to all of the legal outcomes of physical participation, making proposals and casting votes. The articles of incorporation of the companies which are to implement the EGAS are required to contain one of the clauses set out in the provisions of Article 5 of the EGAR (the organisation of general assembly meetings), and no amendment can be made to these provisions.
The procedures of participating in, appointing representatives to, making proposals, stating opinions and casting votes in the general assembly meetings of companies which are quoted on the stock exchange, and the shares of which are monitored by the Central Registry Agency (CRA), are to be conducted on the EGAS, which was prepared and opened for service by the CRA on 01.10.2012.
The Procedures to be Performed Prior to e-General Assembly
1. The Provision of Access to Information and Documentation Connected to the General Assembly
The companies which are to implement the EGAS are required to ensure that the calls to general assembly meetings, which are mandatory pursuant to the Legislation and the articles of incorporation, the documents which are required to be presented for the examination of the right holders prior to general assemblies and the documents concerning the agenda of the meeting are ready and available for access to the right holders on the EGAS, with secure electronic signatures and within the period set out in the TCC.
2. Notice to Participate in the General Assembly in the Electronic Environment
Right holders, who wish to participate in the general assembly in the electronic environment, either in person or by proxy, are required to notify the EGAS of the manner in which they wish to participate.
Where a proxy is to attend the general assembly in place of the right holder, either in the electronic environment or in person, the identity details of the proxy must be registered on the EGAS. When appointing a proxy, the right holder may either grant a general authority to his/her proxy, or grant him/her separate authorities in respect of each item on the agenda. The person who is using the right to attend the meeting as a proxy will cast votes in accordance with the instructions of the person who has granted him/her this authority.
Notifications to be made on the EGAS on behalf of legal entity right holders are required to be signed by the authorised signatory of the legal entity, with the secure electronic signatures generated in their own names, on behalf of the company.
Right holders who wish to participate in the general assembly meeting of a joint stock company in the electronic environment, either in person or by proxy, are required to notify the manner in which they wish to participate through the EGAS, by at the latest two days before the date of the general assembly. This period will be implemented as one day for companies which are quoted on the stock exchange and whose shares are monitored by the CRA.
The company will check the requests to participate in the general assembly, within a maximum of two business days, and accept or reject them. Any requests which have not been rejected within this period will be deemed to have been accepted. This provision will not apply for the general assemblies of companies which are quoted on the stock exchange and the shares of which are monitored by the CRA.
A right holder, who has given notice that he/she will participate in the general assembly meeting in the electronic environment, may withdraw this notification up to one day before the date of the general assembly, through the EGAS. Right holders, who have not withdrawn their request to participate in the general assembly meeting in the electronic environment, may not physically attend the general assembly meeting, either in person or by proxy.
The Procedures to be Performed During the e-General Assembly Meeting
1. Attendance at the General Assembly Meeting
Right holders are required to login to the EGAS with a secure electronic signature, in order to be able to participate in the general assembly in the electronic environment. Entry into the system for participation in the general assembly meeting of a joint stock company in the electronic environment, will begin one hour before the declared time of commencement of the general assembly, and continue until five minutes before the commencement of the general assembly.
The list of the right holders and their proxies, who are to participate in the meeting in the electronic environment, will be obtained from the EGAS prior to the start of the meeting. This list is used in the preparation of the List of Participants.
2. Declaring the General Assembly Meeting Open in the Electronic Environment
The general assembly meeting will be declared open simultaneously in the physical and electronic environments. The determination by the Ministerial representative that the conditions set out in the relevant legislation have been met in order for the meeting to be opened, are mandatory. Experts may also be appointed by the chairman of the meeting in order to ensure that the technical procedures on the EGAS are performed during the meeting.
3. The Electronic Conveying of Opinions and Casting of Votes
Right holders, who are participating in the general assembly meeting of a joint stock company in the electronic environment, may convey their opinions concerning the agenda which is being discussed, in writing, on the EGAS. Right holders may convey a maximum of two opinions for each item of the agenda. Each opinion may be a maximum of 600 characters.
Those who are participating in general assembly meetings in the electronic environment, will cast their votes via the EGAS, after the chairman of the meeting has declared that votes are to be cast on the relevant item of the agenda. The chairman of the meeting at the general assemblies of joint stock companies will commence the casting of votes on each item on the agenda, simultaneously for the right holders who are physically present and those who are participating in the electronic environment. The casting of votes in the electronic environment is restricted to a period of two minutes.
Each item on the agenda must be voted on separately, following the declaration of the chairman of the meeting that votes are to be cast. The right holder or proxy may not alter their votes, which have already been cast, in connection with the relevant item of the agenda. The result of the voting will be forwarded to the chairman of the meeting via the EGAS. The chairman of the meeting will have this result, and any declaration of opposition sent in the electronic environment (if any) is to be recorded in the minutes.
The Procedures to be Performed Following the e-General Assembly Meeting
The list of participants and the minutes of the meeting will be delivered to the Ministerial representative, in an environment which is suitable for the carriage and storage of electronic documents, at the end of the meeting.
Documents which have been created on the EGAS may also be signed with secure electronic signatures, by the members who constitute the council of the meeting, the directors of the company and the Ministerial representative.
Until the practice of transferring the documents related to the general assembly from the EGAS to MERSİS (the central registration system) by the Ministry is commenced, the documents of the general assembly will be sent by the chairman of the meeting to the institutional electronic mail address or Registered Electronic Mail account of the Ministerial representative, or delivered to the Ministerial representative in an environment which is suitable for the carriage and storage of electronic documents, at the end of the meeting.
The Other Obligations to be Adhered to by the Companies Holding e-General Assembly Meetings
Companies, which are to implement the system of participating and casting votes in general assembly meetings, in the electronic environment, and companies which are to provide support services for this purpose, are required to fulfil the below stated obligations, together with the obligations set out above:
a) Companies which are to establish their own EGAS and companies which are to provide EGAS support services have an obligation to have the compliance of the relevant EGAS to the TCC, the EGAR and the Communiqué Concerning the Electronic General Assembly System to be Implemented at the General Assemblies of Joint Stock Companies (EGAC), determined by any one of the Scientific and Technological Research Organisation of Turkey, the Information Technologies and Communications Organisation or any company which employs staff holding a minimum of a CISA (Certified Information Systems Auditor) certificate or who have been authorised to perform audits in this area, and following the approval of the Ministry, have the technical report issued by the said organisations registered and published by the commercial registration directorate, with which they are registered. Companies will not be able to provide support services without fulfilling these obligations. This report needs to be renewed once every three years. However, where deemed necessary by the Ministry, this technical report may be sought at shorter or longer intervals.
b) Companies will provide details of the representative of the organ, independent representatives and institutional representatives, if any, to right holders, on the EGAS.
c) Companies, or the companies which they obtain support services from, are required to maintain the records of all procedures performed on the EGAS and the identity details of all right holders and their representatives who participated in the general assembly in the electronic environment, on the electronic environment, for a period of ten years, while ensuring the confidentiality and integrity of such information. This obligation of maintaining information is performed by the CRA for companies which are quoted on the stock exchange.
d) Companies which are quoted on the stock exchange, and the shares of which are monitored by the CRA, are required to – either personally or through the companies from which they obtain support services – transfer images and sounds related to the general assembly meeting to the EGAS, and adhere to the principles of operation set out in the EGAR concerning the operation of the system.
The Security Criteria of the e-General Assembly System
As a minimum, the EGAS must possess the required design and capacity ensuring that all of the procedures set out in the EGAR can be performed, back-up and disaster recovery plans and network and system security against unauthorised accesses and attacks.
The EGAS should possess an infrastructure which will facilitate the transfer of images and sound and messaging from the place of the meeting, through the electronic environment, support the serial and parallel affixing of a multiple number of electronic signatures, respond to requests for access to the system in the shortest time possible, ensure the confidentiality of the registrations on the electronic general assembly system by right holders, prior to the general assembly, and support the procedures of the affixing of the secure electronic signatures set out in the provisions of the EGAR, by the chairman of the meeting and the Ministerial representative.
The biggest problem in respect of companies which are quoted on the stock exchange is the void of power experienced in the managerial sense. The participation by shareholders in general assemblies can be insufficient. E-General assemblies will make an important contribution in this respect and serve to ensure that publicly traded joint stock companies can be managed in a more transparent manner.
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