What can shareholders do when a Turkish company director refuses to explain company money? Learn about accounting demands, director liability, repayment claims, special audits, interim measures and lawsuits available to foreign shareholders in Turkey.

A foreign shareholder who discovers that a director or manager of a Turkish company refuses to explain where company money has gone may be facing much more than an ordinary disagreement between business partners. A director may control corporate bank accounts and have authority to make payments on behalf of the company, but this does not mean that corporate funds can be treated as personal property or that shareholders can simply be denied any explanation concerning substantial transactions. Where millions of Turkish lira, euros or dollars have left company accounts without identifiable invoices, contracts, corporate approvals or legitimate business purposes, the issue may develop into a dispute involving shareholder information rights, director liability, repayment of company funds, compensation for company losses, related-party transactions, interim asset protection and, in serious cases supported by evidence, potential criminal liability. The correct strategy is usually not to begin with an accusation that the director “stole company money,” but to reconstruct the financial transactions, formally request an explanation, preserve evidence of the refusal and determine exactly what loss was caused to the company.

Does a Turkish Company Director Have to Account for Company Money?

A director or manager entrusted with corporate assets cannot generally treat those assets as if they personally owned them. Management authority exists for the affairs and interests of the company and must be exercised within the applicable statutory, contractual and corporate framework.

This distinction is fundamental:

Authority over company money is not ownership of company money.

A director may have sole banking authority and still face liability if that authority is exercised in breach of duties owed to the company.

Majority Shareholder and Director Are Different Legal Positions

This becomes especially important in closely held Turkish companies.

Suppose one person owns 70% of the shares and is also the company’s manager.

The foreign investor owns the remaining 30%.

The majority shareholder may believe:

“I own 70% of the company, so most of this money is effectively mine.”

That approach is legally dangerous.

Corporate money belongs to the company. Share ownership does not mean that a shareholder personally owns the corresponding percentage of every asset in the company’s bank account.

Example: Director Cannot Explain EUR 1 Million

Assume a foreign shareholder invested EUR 2.5 million in a Turkish company.

During the following year, the managing director transfers:

EUR 300,000 to a personal account.

EUR 250,000 to a company owned by a relative.

EUR 200,000 as alleged “consultancy fees.”

EUR 150,000 through repeated cash withdrawals.

EUR 100,000 as a purported “shareholder loan repayment.”

The foreign shareholder requests supporting documents.

The director provides no loan agreement, no consultancy deliverables, no sufficient expense documentation and no meaningful explanation for the cash withdrawals.

This creates a serious need for corporate and financial investigation.

Refusal to Explain Is Not Itself Proof of Misappropriation

This point should not be overlooked.

A director’s refusal to provide information may strengthen concerns and trigger corporate remedies, but it does not automatically prove that every questioned payment was unlawful.

The underlying transactions must still be examined.

Start With the Company Bank Accounts

The first objective should be determining exactly what happened to the company’s money.

Every significant outgoing transaction should be identified.

Build a Director Transaction Matrix

For each questioned payment record:

Date → Amount → Currency → Company Account → Recipient → Transfer Description → Director Who Authorized It → Accounting Entry → Contract → Invoice → Corporate Approval → Explanation.

This turns a broad allegation into an evidence-based financial claim.

Identify Transfers Directly to the Director

Payments to the director’s personal bank account deserve close examination.

But even these should not automatically be treated as unlawful.

A director may legitimately receive salary, management remuneration, expense reimbursement, repayment of a genuine loan or another lawful payment.

The key issue is the legal basis.

Ask One Question for Every Transfer

Why was this money paid?

Then ask:

Where is the document proving that explanation?

Director Claims It Was Salary

Check the applicable remuneration arrangements and corporate documentation.

A director cannot necessarily justify an unexplained EUR 400,000 transfer merely by later describing it as “salary.”

Director Claims It Was Expense Reimbursement

Request the expenses.

If the director claims to have personally paid EUR 200,000 of company costs, the supporting invoices and original payment records should be examined.

Director Claims It Was a Shareholder Loan Repayment

Trace the transaction backward.

When did the director originally lend money to the company?

How much?

Which account received it?

How was the debt recorded?

Was the alleged debt still outstanding when repayment occurred?

No Original Loan, but Large “Loan Repayment”

This should receive particular scrutiny.

An accounting description created after money has already left the company does not necessarily establish the economic reality of the transaction.

Director Claims It Was a Business Advance

Determine what happened afterward.

If TRY 5 million was advanced to purchase machinery:

Was machinery purchased?

Where is the invoice?

Where is the machinery?

Who owns it?

Was unused money returned?

An advance should not become a permanent unexplained withdrawal.

Cash Withdrawals

Repeated large cash withdrawals can create significant evidentiary problems.

Determine who withdrew the money and how the cash was subsequently recorded.

Accounting Cash May Not Equal Real Cash

Suppose the company’s books show TRY 30 million remaining in the cash account.

The director says:

“The money is in the company safe.”

If the money does not physically exist, the discrepancy requires investigation.

Compare Bank Statements With the General Ledger

Bank records show what actually moved.

Accounting records show how those movements were characterized.

The two should be reconciled.

Example of a Serious Discrepancy

Bank:

EUR 250,000 → Director’s personal account.

Accounting:

EUR 250,000 → Machinery advance.

No machinery exists.

No supplier agreement exists.

No invoice exists.

That combination is considerably more significant than the bank transfer alone.

Examine Shareholder Current Accounts

Amounts owed between shareholders and the company may appear in shareholder-related accounting accounts.

Do not treat the accounting label as the final answer.

The transaction underlying the balance must be established.

Related-Party Payments

A director may transfer company funds without paying themselves directly.

Instead, payments may be made to:

a spouse’s company, a sibling’s company, another business controlled by the director, a longstanding business associate or another related entity.

The commercial substance of these transactions should be investigated.

Family Relationship Does Not Automatically Mean Wrongdoing

A director’s relative can genuinely provide services to the company.

The relevant questions are whether services were actually provided, whether the price was commercially explainable and whether applicable corporate rules were followed.

Consultancy Agreements

Large consultancy payments frequently become disputed in shareholder litigation.

A written consultancy agreement should be only the beginning of the investigation.

Ask What the Company Received

If EUR 500,000 was paid for consulting services, identify the actual work.

Where are the reports?

Where is the correspondence?

Who performed the work?

What business problem was solved?

Invoice Alone Is Not Conclusive

An invoice documents the claimed transaction.

It does not necessarily prove that the underlying service actually occurred.

Company Assets Sold Below Market Value

A director may also cause company loss without transferring cash directly to themselves.

For example, company real estate worth TRY 100 million may be sold to a related company for TRY 45 million.

The transaction may require examination of valuation evidence, corporate authority, conflicts of interest and the company’s resulting loss.

Customer Payments Diverted Elsewhere

Another form of potential company loss occurs before money reaches the corporate bank account.

A director may instruct customers to make payments to another company.

Compare Customer Invoices With Bank Receipts

Determine whether invoiced revenue actually entered the company’s accounts.

Related Company Receives the Customers

The director may establish another business and redirect customers there.

This can turn the dispute into a broader claim involving corporate opportunities, company assets, customer relationships and management duties.

Formal Demand for Information

Once the questioned transactions have been identified, the foreign shareholder should use the information and inspection mechanisms appropriate to the particular company form.

The procedure differs significantly between an A.Ş. and Ltd. Şti.

Joint Stock Company – A.Ş.

For a Turkish joint stock company, shareholder information and inspection rights are principally structured under TCC Article 437.

A foreign shareholder should formulate specific questions concerning the company’s affairs and transactions rather than relying on a vague demand for complete access to everything.

Limited Liability Company – Ltd. Şti.

For a Turkish limited company, TCC Article 614 provides an important information and inspection framework concerning company affairs and accounts.

The procedure applicable to restrictions and subsequent judicial protection should be followed carefully.

Director Says “You Are Only a Minority Shareholder”

That is not a complete legal answer.

Minority status does not automatically eliminate statutory shareholder rights.

Director Says “You Are a Foreigner”

Foreign nationality likewise does not automatically remove rights attached to shares in a Turkish company.

Director Says “These Are Company Secrets”

Commercial confidentiality can be relevant to the scope of disclosure.

But it should not automatically be accepted as a blanket explanation for refusing every question concerning company finances.

Director Simply Ignores the Request

Silence should be documented.

The shareholder should preserve proof of the original request and determine the next corporate or judicial step without allowing important procedural periods to expire.

Use Written Requests

Do not rely exclusively on phone calls.

A written request establishes what was asked, when it was asked and how management responded.

Ask Transaction-Specific Questions

Instead of:

“Where did all the money go?”

ask:

“Please explain the legal and commercial basis of the EUR 375,000 transferred from the company’s account to Company X on 18 March 2026 and provide the corresponding contract, invoice, accounting entry and corporate authorization.”

That is far more useful in later litigation.

Preserve Evidence of the Refusal

Keep emails, letters, WhatsApp communications and general assembly minutes documenting the director’s response.

General Assembly Strategy

Where applicable, questioned transactions can be raised through the company’s general assembly.

The foreign shareholder should ensure that material questions and refusals are properly documented.

Special Audit in an A.Ş.

Where the statutory conditions are satisfied, the special-audit mechanism can become important for an A.Ş. shareholder seeking clarification of particular transactions.

The request should identify specific events requiring investigation.

For example:

Payments made to companies controlled by Director X between January and July 2026.

This is stronger than asking:

“Audit everything.”

Independent Forensic Accounting

Before commencing a major liability lawsuit, independent financial analysis can be extremely useful.

The accountant should reconstruct company cash flows rather than simply list suspicious payments.

Calculate Total Available Funds

Determine:

Opening Cash + Customer Revenue + Capital Contributions + Shareholder Financing + Bank Loans + Other Receipts.

Then compare these figures with documented company expenditures.

Calculate the Unexplained Balance

Suppose EUR 2 million was transferred under the director’s authority.

Investigation establishes:

EUR 700,000 genuine supplier payments.

EUR 300,000 legitimate salaries and taxes.

EUR 200,000 genuine business expenses.

EUR 100,000 subsequently returned.

The unexplained amount may therefore be EUR 700,000.

A precisely calculated loss is usually much stronger than alleging that the entire EUR 2 million was stolen.

Director and Manager Liability Under Turkish Company Law

Where directors or managers culpably breach obligations arising from Turkish company law or the company’s articles and cause damage, management-liability provisions, including TCC Article 553 where applicable, can become central to the dispute.

The liability case should establish a clear chain:

Duty → Breach → Transaction → Damage → Causation → Responsible Director.

Do Not Sue Based Only on Job Title

Being a director does not automatically make someone personally liable for every company loss.

The alleged breach and connection with the damage must be established.

Multiple Directors

Where several directors exist, determine who participated in the relevant transaction.

Who proposed it?

Who approved it?

Who signed?

Who instructed the bank?

Who received the money?

Who concealed the transaction?

Liability should be analyzed individually rather than automatically treating every director identically.

Can the Company Sue the Director?

Depending on the nature of the transaction and legal basis, the company may have claims seeking repayment or compensation for losses caused by improper conduct.

Can the Foreign Shareholder Personally Sue?

Potentially, depending on the legal basis and nature of the damage.

However, a critical distinction must be made between damage suffered by the company and direct damage suffered personally by the shareholder.

Example: EUR 1 Million Missing From Company

Foreign shareholder owns 40%.

Director improperly removes EUR 1 million.

It would be incorrect automatically to conclude:

Foreign shareholder’s claim = EUR 400,000.

The EUR 1 million belonged to the company.

The immediate loss may therefore be corporate loss.

The appropriate claimant and remedy must be determined under the relevant liability framework.

Repayment Claim

Where money was transferred to a director without a valid legal basis, recovery of the payment may be pursued under the appropriate substantive legal grounds.

Compensation Claim

Where management misconduct causes measurable company damage, a compensation claim may become available if the applicable liability requirements are satisfied.

Director Liability Lawsuit

Where the loss results from breach of management duties, a director or manager liability action may be considered.

Corporate Resolution Issues

Before bringing particular proceedings, determine whether a corporate decision is necessary and which company body has authority concerning the claim.

This can become particularly important when the person controlling management is also the potential defendant.

Conflict of Interest

A director should not be allowed to turn corporate control into practical immunity from scrutiny.

Where management cannot act independently because the potential defendant controls the company, the procedural strategy requires careful planning.

Precautionary Attachment

Winning the case years later may be meaningless if the director has disposed of every recoverable asset.

Where a qualifying monetary receivable exists and statutory requirements are met, precautionary attachment (ihtiyati haciz) may require consideration.

Precautionary Injunction

Where protection concerns a specific disputed asset or right, precautionary injunction (ihtiyati tedbir) may instead be relevant.

The two mechanisms should not be confused.

Identify Director Assets Early

Where legally possible and relevant to the recovery strategy, identify potential assets such as real estate, vehicles, company shares and receivables.

Director Starts Transferring Assets to Relatives

Timing can become highly relevant.

Suppose the shareholder sends a formal demand on Monday.

On Wednesday, the director transfers an apartment to a spouse.

On Friday, another property is transferred to a sibling.

The chronology should be preserved.

Transfers Designed to Defeat Recovery

Depending on the circumstances and later enforcement position, additional remedies concerning prejudicial transfers may require examination.

They are not automatically available merely because an asset was transferred to a relative; their statutory requirements must be established.

Evidence Preservation

Where the director controls the company systems, the foreign shareholder should preserve all records already lawfully accessible before access disappears.

This may include bank statements, accounting exports, financial statements, invoices, contracts, board decisions, general assembly records and communications.

Do Not Alter Corporate Evidence

Original files should be preserved.

Where possible, retain metadata and complete communication chains.

Accounting Access Suddenly Removed

Document the date.

Online Banking Access Removed

Document the date and previous authority.

Company Email Disabled

Preserve available evidence showing when access ended.

Accountant Stops Responding

Preserve earlier correspondence and subsequent requests.

A sequence of simultaneous access restrictions can become important in explaining why judicial intervention was required.

Court-Ordered Evidence and Expert Examination

During litigation, disputed financial transactions may require expert examination.

Financial experts may compare corporate books, accounting entries, bank movements and supporting documentation.

Evidence Determination Before Main Proceedings

Where there is a genuine risk that evidence may disappear or become substantially harder to obtain, procedural mechanisms aimed at preserving or determining evidence may need consideration.

Criminal Liability: When Should It Be Considered?

A director’s refusal to account for company money does not automatically constitute a criminal offense.

The underlying conduct must be examined separately.

Breach of Trust

If a person entrusted with company assets intentionally disposes of those assets contrary to their entrusted purpose for personal benefit or another person’s benefit, the circumstances may require examination under Turkish criminal-law provisions concerning breach of trust.

Fraud

Where deceptive conduct was used to obtain company or investor money, fraud provisions may potentially become relevant.

Forged Invoices

If false invoices were created to disguise personal transfers, additional criminal issues may arise.

Forged General Assembly or Board Decisions

Fabricated corporate authorization can materially change the case.

Forged Foreign Shareholder Signature

If documents falsely indicate that the foreign investor approved the transaction, preserve the originals and consider whether forensic signature examination is necessary.

False Power of Attorney

Use of a forged or unauthorized power of attorney can create additional civil and criminal consequences.

Manipulated Accounting Records

If accounting records were altered after the shareholder began asking questions, preserve earlier versions where lawfully available.

Criminal Complaint Is Not a Debt Collection Method

This distinction is essential.

A commercial disagreement should not be characterized as a crime simply to pressure the director into paying.

Criminal proceedings should be based on evidence supporting the elements of a genuine offense.

Criminal Investigation and Company Recovery Can Proceed Separately

Where criminal conduct is genuinely suspected, a criminal investigation may help establish certain facts.

But recovering company money usually requires a broader strategy.

The foreign shareholder should not simply file a criminal complaint and wait.

What If the Director Has Left Turkey?

Leaving Turkey does not automatically eliminate civil liability concerning a Turkish company.

The litigation and enforcement strategy should consider the location of the director and their assets.

What If the Money Was Transferred Abroad?

Preserve SWIFT information, recipient details, destination banks and transaction descriptions already available.

Cross-border recovery may require additional procedural analysis depending on where the money or assets are located.

What If the Money Went to Cryptocurrency?

Transfers to cryptocurrency platforms should be identified precisely.

Do not simply classify all crypto transactions as unrecoverable.

The available evidence and subsequent asset trail should be analyzed.

What If the Director Says the Money Was Lost in Business?

Directors are not automatically personally liable whenever a business investment fails.

Commercial risk and breach of management duties are different.

The question is whether the director acted within legitimate business management or breached applicable duties and caused compensable damage.

Bad Business Decision Versus Misuse of Company Funds

Suppose EUR 500,000 was invested in new machinery that later became commercially unsuccessful.

That is fundamentally different from transferring EUR 500,000 to the director’s personal account without a legitimate basis.

First 24 Hours After the Director Refuses to Account

Preserve all lawfully accessible bank records, accounting documents, financial statements, invoices, contracts and communications. Identify the exact transactions for which explanations are missing.

First 48 Hours

Create a transaction matrix, identify recipients, classify related parties and compare every questioned payment with the company’s accounting records.

First 72 Hours

Determine whether the company is an A.Ş. or Ltd. Şti., prepare targeted formal information requests, preserve proof of refusal and evaluate whether continuing transfers create an urgent asset-protection problem.

Evidence Checklist

The core evidence should ordinarily include company bank statements, bank transfer receipts, accounting ledgers, trial balances, shareholder current accounts, invoices, contracts, consultancy agreements, shareholder loan documentation, corporate resolutions, general assembly minutes, board or manager decisions, cash records, foreign investment records, SWIFT confirmations, emails, WhatsApp communications, communications with accountants, related-company information, customer payment records, asset-sale documents and evidence of subsequent transfers or personal asset acquisitions where lawfully available.

2026 Legal Strategy When a Turkish Director Refuses to Account for Company Money

The strongest strategy is to separate information, liability and recovery into connected stages. First, reconstruct the company’s financial position and identify every transaction that cannot presently be explained. Second, exercise the shareholder information and inspection mechanisms applicable to the company’s legal form and make transaction-specific written requests. Third, document every refusal, incomplete explanation and missing supporting document. Fourth, compare bank records with accounting records and determine whether money went to directors, shareholders, relatives or related companies. Fifth, calculate the company’s actual net loss rather than relying on the gross amount transferred. Sixth, determine which directors or managers participated in each transaction and whether their conduct may create liability under Turkish company law. Seventh, identify recoverable assets and assess whether precautionary attachment, precautionary injunction or evidence-preservation measures are justified. Finally, distinguish civil and corporate liability from potential criminal conduct. The practical roadmap is therefore: preserve financial evidence → identify all company accounts → reconstruct incoming funds → identify unexplained outgoing payments → compare banking and accounting records → request invoices and contracts → verify shareholder loans → examine management remuneration → investigate cash withdrawals → identify related-party transactions → trace funds to directors and related companies → document the director’s refusal to account → exercise shareholder information rights → consider special audit where applicable → obtain forensic accounting analysis → calculate net company loss → identify responsible directors → establish duty, breach, damage and causation → identify recoverable assets → seek interim protection where justified → pursue repayment and director liability proceedings → separately evaluate criminal liability where concrete evidence supports it → enforce recovery.

Frequently Asked Questions

1. Can a company director refuse to explain where company money went?

A director’s obligations and the shareholder’s ability to demand information depend on the company structure and circumstances. A shareholder may have statutory information and inspection rights, and unexplained transactions can lead to further corporate and liability proceedings.

2. Can a majority shareholder who is also director use company money personally?

Majority ownership does not automatically give the shareholder personal ownership of corporate funds. Personal payments require an appropriate legal and corporate basis.

3. Can the foreign shareholder demand company bank statements?

Potentially, through the information and inspection mechanisms applicable to the company. Share ownership alone does not necessarily provide direct online banking access.

4. Can the director be personally liable for missing company money?

Potentially. Where the director culpably breaches applicable duties and causes compensable company damage, personal management liability may arise under the relevant provisions of Turkish company law.

5. Can money transferred to the director’s personal account be recovered?

Potentially, if the payment lacked a valid legal basis or resulted from conduct creating repayment or compensation liability. The exact claim depends on why and how the payment was made.

6. Can the director’s assets be frozen before the lawsuit ends?

Appropriate interim protection may be available where statutory conditions are satisfied. Precautionary attachment and precautionary injunction are different remedies and should be selected according to the underlying claim.

7. What if the director transferred assets to a spouse after the dispute started?

The timing and circumstances should be documented. Depending on the eventual claim and enforcement conditions, subsequent transfers may become relevant to additional recovery remedies.

8. Is refusing to account for company money automatically a crime?

No. The refusal and the underlying financial transactions must be examined separately. Criminal liability requires conduct satisfying the elements of a specific criminal offense.

9. Can the foreign shareholder claim their percentage of the missing money personally?

Not automatically. If the money belonged to the company, the immediate loss may principally be company damage. Direct shareholder damage and company damage must be distinguished.

10. What should the foreign shareholder do first?

Preserve the available financial evidence and create a transaction-by-transaction list of unexplained payments. The next legal step should be selected only after identifying the company form, responsible persons, approximate company loss and risk that assets or evidence may disappear.

Legal Support for Foreign Shareholders in Director Liability and Company Fund Disputes in Turkey

Foreign investors facing a Turkish director who refuses to explain company funds may require coordinated legal assistance concerning shareholder information rights, company bank records, accounting investigations, related-party payments, director and manager liability, repayment claims, compensation proceedings, interim measures and asset recovery.

Fırat Fesih Kaya Law Office assists foreign shareholders, international investors and companies involved in corporate financial disputes in Turkey. Fırat Fesih Kaya can assist with investigating unexplained company payments, obtaining corporate information through the appropriate procedures, examining director and manager liability, protecting company assets and pursuing repayment or compensation where the evidence supports a claim.

Phone: +90 312 434 22 22
Mobile Phone: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No: 221, Yildirim Tower, Balgat, Cankaya / Ankara, Turkey