FAQ

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• Does a publicly traded company have to distribute dividends?

  With the decision of the Capital Markets Board dated 27.01.2010 and number 02/51 regarding the principles of distribution of the profits earned by publicly-held corporations from their Year 2009 operations, it has been decided not to stipulate any minimum profit distribution requirement in respect of the dividend distributions to be allocated by the publicly-held corporations whose stocks are traded on the exchange.   However, corporations whose stocks are traded on the exchange may, subject to a decision made by their general meetings, choose to:

  • distribute the dividend completely in cash, 
  • distribute the dividend completely as stocks, 
  • distribute the dividend partly in cash and partly as stocks, and retain the remainder in the corporation,  
  • retain the dividend in the corporation without distributing it in cash or as stocks if the amount of the first dividend remains below 5% of the existing paid-in capital.

• May a company withhold its commercial secrets in public disclosure?

  Pursuant to the Capital Market Board’s Communiqué, Series: VIII, No. 54 “On Principles Governing Public Disclosure of Material Circumstances”, companies whose stocks are traded on the Exchange are obliged to disclose the statements that are likely to affect the investor’s decision in a timely fashion and supply the information to the public in real time.    The underlying rule is to inform the investor of any information which is likely to affect the prices, any significant change in the financial standing of the company, or any important development.  

  Corporations may defer the public disclosure of insider information to avoid damage to their legitimate interests provided that such avoidance does not result in misleading the public and the corporation is capable of maintaining the confidentiality of such information.    “The GUIDE Regarding Material Disclosures Prepared Under the Communiqué on Principles Governing Public Disclosure of Material Circumstances”, which is an Appendix to and complementary document of the Communiqué, describes the criteria which material circumstances whose public disclosure may be deferred should meet in its section 6 entitled “Deferral of Disclosure of Insider Information”. 
   

• May the control of the company be lost after public offering?

  In public offerings, companies can divide their stocks into groups in their articles of association, and assign different privileges to each group.  Such privileges may include the privilege of nominating a candidate for the board of directors.  In that case, companies unwilling to lose control of the company may assign such a privilege to stock groups which will not be publicly traded.

  On the other hand, companies can offer a certain part of their capital to the public. So long as the publicly traded portion remains below the decision quorum of the General Meeting, it will not grant control over the company.

• Is a company allowed to be delisted/deregistered on its own initiative?

  Delisting/deregistration of  a company on its own initiative is regulated under Article 25 of the ISE Listing Regulation which says “Delisting is subject to the affirmative decision of the Executive Council of the Exchange. The Executive Council may require the company to take some precautions prior to its decision in order to prevent any potential loss that might be suffered by the investors”, and is an issue which is currently pending CMB approval. When the opinion of CMB is received, the public will be informed.

• Is it possible that foreigners may possess the majority of the company after public offering?

  It is pointed out that foreign investors currently enjoy a share of approximately 67% in our exchange.  This ratio does not represent the ratio of the whole capital of the companies, but only the portion that is publicly-traded.  On the other hand, it is possible to avoid such a situation through categorizing stocks as publicly traded stocks and non-publicly traded stocks.

• Which method is much preferred in public offerings, sale of existing shares or capital increase?

  The below chart gives a breakdown of the types of public offerings realized in the last five years:

  	2005	2006	2007	2008	2009	Total
  Capital Increase	1	3	2	-	1	7
  Sale of Existing Shares	5	7	3	2	-	17
  A combination of the two	1	5	4	-	-	10
  Total	7	15	9	2	1	34

• How are allocations made in public offerings?

  In public offerings, it is permissible to make allocations to different investor groups.  However, when an allocation is made, it is mandatory to allocate to the small individual investors group 30% of the offering if the amount of public offering is above TL 163.5 million,  or 50% of the offering if the amount of public offering is less than the said amount.

• What costs are involved in Public Offerings?

  Fees Payable to Intermediary Institutions: 
  Such fees vary depending on the size of public offering and the nature of intermediation service provided.

  Fees Payable to Capital Markets Board:
  A registration fee equal to two thousandths (0.2%) of the issue value of the shares registered and to be sold is charged.

  Fees payable to ISE:
  A listing/registration fee equal to one thousandth (0.1%) of the nominal amount of the capital is charged for the shares to be listed or registered.

  Fees payable to CRA:
  An initial membership fee equal to 0.1% of the issued/paid-in capital is charged to issuers of shares, however this fee cannot be less than TL 2,000 and more than TL 50,000.

  Other cost items:
  In addition to the above fees, there are fees payable to the independent audit firm for independent audit reports and publicity costs at home/overseas.