SPECIAL AUDITOR IN A JOINT STOCK COMPANY

The right to request a special audit

General Assembly approval

ARTICLE 438– (1) Every shareholder may request the general assembly to clarify certain events through a special audit, even if it is not on the agenda, if it is necessary for the exercise of shareholder rights and if the right to obtain information or inspect has been exercised previously.

(2) If the general assembly approves the request, the company or each shareholder may request the appointment of a special auditor from the primary commercial court in the place where the company's headquarters are located within thirty days.

Rejection by the general assembly

ARTICLE 439– (1) If the general assembly rejects the request for special audit, shareholders holding at least one-tenth of the capital, or one-twentieth in publicly traded joint-stock companies, or shareholders whose total nominal value of shares is at least one million Turkish Lira, may request the appointment of a special auditor from the primary commercial court in the place where the company's headquarters are located within three months.

(2) A special auditor is appointed if the petitioners, founders or company organs convincingly demonstrate that they have caused damage to the company or its shareholders by violating the law or the articles of association.

 Assignment

ARTICLE 440– (1) The court shall render its decision after hearing the company and the claimants.

(2) If the court finds the request justified, it will determine the subject of the examination within the scope of the request and appoint one or more independent experts. The court's decision is final.

 Duty

ARTICLE 441– (1) Special audits must be conducted within a period useful for the purpose and without unduly disrupting the company's operations.

(2) The board of directors authorizes the examination of the company's books, correspondence, and assets, including cash, securities, and goods.

(3) Founders, organs, agents, employees, trustees and liquidators are obliged to inform the special auditor about important facts. In case of dispute, the court will make the decision. The court's decision is final.

(4) The special auditor obtains the company's opinion on the results of the special audit.

(5) The special auditor is obliged to keep confidential.

 Report

ARTICLE 442– (1) The special auditor shall submit a detailed report to the court regarding the results of the audit, while also protecting the company's secrets.

(2) The court notifies the company of the report and decides on the company’s request as to whether the disclosure of the report would harm the company’s secrets or other interests worthy of protection and therefore whether it should not be made available to the claimants.

(3) The court allows the company and the claimants to provide their assessments of the report and to ask additional questions.

Processing and explanation

ARTICLE 443– (1) The board of directors submits the report and its related assessments to the first general assembly.

(2) Each shareholder may request a copy of the report and the opinion of the board of directors from the company within one year following the general assembly meeting.

Expenses

ARTICLE 444– (1) If the court has accepted the appointment of a special auditor, it shall specify the advance payment and expenses to be paid by the company. If special circumstances justify it, the expenses may be partially or fully charged to the applicants.

(2) If the general assembly decides to appoint a special auditor, the expenses shall be borne by the company.

 

The right to request the appointment of a special auditor is one of the important individual and minority rights in a joint-stock company.

It depends on certain conditions being met;

This right is, by its very nature, an inalienable individual partnership right. The request for the appointment of a special auditor, among other things..

It must be necessary for the exercise of shareholder rights. This right is a secondary right. Here, the right to information or

With regard to the condition that the right of inspection has been exercised previously, it is only possible to obtain information by applying to the relevant authorities or

It is sufficient to wish to exercise the right of inspection, but for that request to be denied.

The subject of a special audit may be limited to specific events, particularly those occurring within the partnership. Special auditor

Cases where the appointment of board members may be requested, for example, merger agreements, partnership acquisitions, etc

Their behaviors and spending habits may vary.

The right to request the appointment of a special auditor is an important exception to the principle of adherence to the agenda. One of the partners may request this

If, based on the circumstances, the General Assembly requests the appointment of a special auditor during its meeting, and all conditions are met, the General Assembly

The chairman must put the request to a vote. The request cannot be rejected on the grounds of the principle of adherence to the agenda. GC

The request is approved with the usual quorum of 418.

There are two possibilities as a result of the vote; The first possibility is that the General Assembly may approve the request for the appointment of a special auditor. The partnership or..

Each shareholder has 30 days to file a special lawsuit with the primary commercial court in the location of the company's headquarters

He may request the appointment of an auditor (438/2). The 30-day period is a forfeiture period.

If a special auditor is appointed by the court based on the General Assembly's decision to appoint a special auditor,

The costs of the private auditor are covered by the partnership.

The General Assembly is not obliged to accept the request for the appointment of a special auditor. The provisions and consequences of this are as follows:

 According to Article 439/1, upon the General Assembly's rejection of the special auditor's request, the capital must be at least..

Shareholders holding one-tenth of the shares, or shareholders whose total nominal value of shares is at least 1 million TL,

Within 3 months, a special auditor must be appointed by the primary commercial court in the location where the partnership's headquarters are situated

They may request it. According to Article 438, the rejection decision of the GC is a fundamental condition for applying to the court, according to Article 439/1.

According to Article 439/2, if the Board of Directors violates the law or the partnership agreement and causes damage to the partnership or shareholders..

They also need to convincingly demonstrate the harm they have caused.

The private auditor must be independent and an expert.

During audits, the Board of Directors provides the special auditor with information about facts that are significant to the specific audit subject.

Not only the minority shareholders, but also the other shareholders can benefit from the report prepared by the special auditor. The report,

It allows partners to obtain information regarding the partnership's affairs. This report, prepared by the special auditor, is the same

It also serves as evidence in liability cases.

 The right to request the appointment of a special auditor in a joint-stock company is both a right of individual shareholders and a fundamental right

We see that it is structured as a mix of minority rights. Individual shares are required to be able to request a special auditor from the GC

While simply owning the property is sufficient, if the General Assembly refuses to appoint a special auditor, the applicant can appeal to the court to have a special auditor appointed

Being in the minority is a requirement to ensure appointment. The special auditor uncovers corrupt practices by managers

This is an important common right. With this right, certain suspicious transactions of the managers are investigated, otherwise the managers..

It will not be subject to a comprehensive audit. However, the decision to discharge the liability rests on the appointment of a special auditor

It has negative consequences. Because with the discharge of liability, partners have the right to file a liability lawsuit even if they voted against it

The statute of limitations is reduced to 6 months. It may not be possible to obtain a special auditor's report within such a short period. Therefore..

The partners should be vigilant and prevent the discharge, especially by filing a lawsuit for annulment and requesting a special auditor together in this regard

It would be helpful if they took them.

The Role of the Lawyer:

In notices, information requests, and pre-General Assembly requests sent to the company, the lawyer structures the questions and requests for investigation with a legal framework. By providing evidence that the right to access information has been obstructed or insufficient, they prepare the legal ground for the special audit phase.

The lawyer defends the rights of the minority or shareholders at the General Assembly meeting. They ensure that the motions, objections, and grounds for rejection are recorded in the General Assembly minutes. These minutes will be the first evidence examined in court.

It substantiates suspicious transactions within the company (e.g., non-comparable related-party transactions, suspicious asset transfers, concealed profit transfers) using legal terminology during the claim phase. By clearly defining what needs to be audited, it increases the likelihood of the court accepting the claim.

It's not enough to simply make an accusation; with financial literacy and legal expertise, they present evidence of irregularities to the court. They convince the judge of the "necessity" of an independent auditor's investigation.

It prevents the loss of deadlines, proves shareholding ratios, and eliminates the risk of the case being dismissed on procedural grounds.

It is crucial that the initial petition submitted to the court is error-free, as it is a single-session/short process with no possibility of recourse or appeal. Furthermore, if the special auditor's report is positive, the lawyer can use this report to file liability lawsuits against the Board of Directors members or initiate proceedings to annul the decisions.