Turkish Subsidiary Manager Makes Unauthorized Payments: Criminal Liability and Asset Recovery (2026 Updated Guide)

A manager of a Turkish subsidiary makes unauthorized payments or transfers company funds. Learn about criminal complaints, evidence preservation, bank records, asset recovery, interim measures and manager liability in Turkey.

A foreign parent company may discover that the manager of its Turkish subsidiary has transferred company funds without authorization, paid related parties, withdrawn cash, used corporate accounts for personal expenses or approved transactions that cannot be justified by genuine company business. These cases require a rapid response because the dispute can involve criminal liability, corporate management duties, recovery of company assets, preservation of banking evidence and urgent measures against further transfers at the same time.

The first objective should be to determine exactly where the money went, who authorized the payments, who benefited from them and whether the transactions had a legitimate commercial basis. The foreign shareholder should avoid treating every unauthorized transaction automatically as a criminal offense, but serious unexplained transfers should be investigated without delay.

What Is an Unauthorized Corporate Payment?

An unauthorized payment may include a transaction exceeding the manager’s authority, a transfer made without required corporate approval, payment to a company controlled by the manager, use of corporate funds for private expenses, fictitious supplier payments, unexplained cash withdrawals or transfers unsupported by genuine contracts or invoices.

The legal consequences depend on the actual circumstances.

Lack of Corporate Authorization Does Not Automatically Mean a Crime

A manager may breach internal approval procedures without necessarily committing a criminal offense. Criminal liability generally requires examination of the conduct, intent, destination of the money and applicable offense.

The corporate-law breach and criminal-law analysis should therefore be conducted separately.

Freeze Further Financial Exposure Immediately

Once suspicious transactions are discovered, the company should review the manager’s continuing access to bank accounts, online banking, company credit cards, payment systems and financial records.

Any changes to authority should be made through legally valid corporate and banking procedures.

Preserve Bank Records Before Access Changes

Before removing access, preserve available transaction histories, account statements, payment confirmations and beneficiary information.

Evidence should be collected in a manner that allows its authenticity and origin to be demonstrated later.

Identify Every Suspicious Transaction

Prepare a transaction matrix showing the date, amount, currency, originating account, beneficiary, payment description, alleged commercial purpose and approving person.

This allows the company to distinguish ordinary payments from transactions requiring investigation.

Trace the Beneficiary

A bank transfer to an unfamiliar company should trigger further investigation.

Determine who owns or controls the recipient, whether it has any genuine commercial relationship with the subsidiary and whether the manager or relatives have a connection with it.

Related-Party Payments Require Particular Attention

Payments to businesses controlled directly or indirectly by the manager may create significant conflict-of-interest concerns.

Obtain corporate registry information, contracts, invoices, delivery documents and correspondence concerning the recipient.

Check Whether Goods or Services Were Actually Supplied

An invoice alone does not prove that a genuine transaction occurred.

Compare invoices with purchase orders, contracts, warehouse records, delivery notes, employee communications and accounting entries.

Fictitious Invoices Can Increase Criminal Exposure

If company money was transferred using fabricated transactions or false supporting documents, the matter can extend beyond an ordinary corporate dispute.

Preserve the original documents and determine who prepared, approved and recorded them.

Cash Withdrawals Should Be Investigated Quickly

Large or repeated cash withdrawals can be particularly difficult to trace after time passes.

Identify the person who made each withdrawal, the stated business purpose and whether corresponding cash-account records exist.

Personal Expenses Paid From Corporate Accounts

Company funds used for personal travel, accommodation, vehicles, luxury purchases or unrelated private expenses may create liability depending on the circumstances and authorization structure.

Each transaction should be evaluated individually rather than grouped under a general accusation.

Review the Manager’s Authority

Obtain the company’s articles, internal directives, board or shareholder resolutions, signature circulars, powers of attorney and banking mandates.

Determine whether the manager acted outside their authority or violated an internal limitation.

Internal Limits and Third Parties Are Separate Issues

A manager may violate an internal company rule even where a bank or third party processed the transaction based on apparent external authority.

This distinction can affect both recovery strategy and potential claims against third parties.

Review Board and Shareholder Approvals

Some transactions may require additional corporate approval.

Check whether the manager created false minutes, exceeded an approved budget or represented that authorization existed when it did not.

Preserve Emails and Corporate Messages

Company email, internal messaging systems and business correspondence may reveal who requested and approved the transfer.

Evidence collection should respect applicable privacy and data-protection requirements.

Preserve Accounting Records

General ledgers, journals, account codes, invoices, expense records and bank reconciliations can show how suspicious payments were characterized internally.

A payment described in the bank record as “consultancy” may have been recorded differently in the accounting system.

Do Not Secretly Alter Accounting Records

If suspicious entries are identified, preserve the original records before making corrections.

Later accounting adjustments should remain traceable.

Consider an Independent Forensic Review

Where numerous transactions or substantial amounts are involved, an independent accounting or forensic review can help reconstruct the flow of funds.

The investigation should distinguish provable loss from accounting irregularities.

When Can Criminal Liability Arise?

Depending on the facts, unauthorized diversion of corporate assets can potentially raise issues involving offenses such as breach of trust, fraud, forgery or other property-related crimes.

The correct characterization depends on how the funds were obtained, transferred and concealed.

Breach of Trust May Be Relevant

Where a person entrusted with corporate assets uses them contrary to the purpose of that entrustment, breach-of-trust issues may arise depending on the specific facts.

The existence of managerial authority does not necessarily give unlimited freedom to use corporate money for personal purposes.

Fraud May Require Different Evidence

Where the manager allegedly obtained or transferred funds through deceptive conduct, the elements of fraud should be analyzed separately.

Not every unauthorized payment is automatically fraud.

Forged Documents Can Create Separate Exposure

Fake signatures, fabricated corporate resolutions, altered invoices or false documents used to support transfers can raise separate criminal-law issues.

The original documents should be secured for examination.

Who Should File the Criminal Complaint?

The appropriate complainant should be determined according to the company structure, representation authority and nature of the alleged offense.

Where the suspected manager still formally represents the Turkish subsidiary, corporate representation issues should be resolved carefully before procedural action.

Foreign Parent Company and Turkish Subsidiary Are Separate Legal Persons

A foreign shareholder should distinguish losses suffered directly by the Turkish subsidiary from losses suffered personally by the shareholder.

If money was removed from the subsidiary’s account, the subsidiary may be the directly injured entity.

Remove or Restrict the Manager Through Proper Corporate Procedures

If the foreign shareholder intends to dismiss or remove the manager, the company’s legal form and governing documents should be reviewed.

Corporate resolutions, registration requirements and banking notifications should be coordinated so that the former manager cannot continue acting for the company.

Revoke Powers of Attorney Where Necessary

Review every power of attorney granted to the manager.

Revocation should be communicated through appropriate channels where necessary to prevent continued transactions.

Notify Banks Promptly

Once representation authority has legally changed, banks should receive the relevant corporate documentation promptly.

Do not assume that an internal dismissal automatically updates bank mandates.

Can the Company Recover the Money?

Potentially. Recovery strategy depends on whether the funds remain with the manager, were transferred to related companies, were used to acquire assets or were transferred onward to third parties.

Asset tracing should begin as early as possible.

Follow the Money

For each transfer, determine the first beneficiary and any available evidence of onward movement.

Where the recipient is a related company, investigate whether funds were subsequently paid to the manager or used to acquire property.

Civil Claims May Accompany Criminal Proceedings

The company should evaluate contractual, corporate and tort-based recovery mechanisms separately from the criminal investigation.

A criminal complaint should not be treated as a substitute for a comprehensive asset-recovery strategy.

Urgent Interim Measures May Be Necessary

Where there is a concrete risk that assets will be transferred or dissipated, available interim judicial measures should be assessed promptly.

The legal requirements depend on the specific claim and requested measure.

Bank Account Measures Require a Legal Basis

A foreign shareholder cannot simply instruct a bank to freeze another person’s private account because fraud is suspected.

Account restrictions generally require an appropriate legal or judicial basis.

Real Estate and Vehicles Should Be Investigated

If company funds may have been used to acquire real estate, vehicles or other identifiable assets, preserve evidence linking the purchase to the disputed transfers.

Timing can be particularly important.

Transfers to Relatives Should Be Reviewed

A manager may transfer funds or assets to relatives or associates.

Such transfers should be investigated factually, but relationship alone does not prove that the recipient participated in wrongdoing.

Third-Party Good Faith Can Affect Recovery

Recovering assets from a direct wrongdoer can differ legally from recovering property transferred to an unrelated third party.

The recipient’s knowledge, consideration paid and nature of the transaction may become relevant.

International Transfers Create Additional Complexity

If money was transferred outside Turkey, identify the receiving bank, jurisdiction, beneficiary and transaction reference immediately.

Cross-border recovery may require legal action or evidence collection in more than one country.

Preserve SWIFT and Payment Information

International transfer records can be important in reconstructing the payment route.

Request available banking documentation before ordinary retention periods or practical access problems make recovery more difficult.

Notify the Foreign Parent Company’s Auditors

Material unauthorized payments may have accounting, audit and financial-reporting implications.

The parent company should coordinate legal strategy with appropriate accounting and compliance teams.

Consider Tax Consequences

Fictitious expenses, unsupported invoices or personal expenditures recorded as company costs may create separate tax exposure for the subsidiary.

The company should consider whether corrective filings or accounting measures are required.

Review Money-Laundering Risks Carefully

Where the movement of funds involves fictitious companies, multiple transfers or attempts to conceal the beneficial recipient, additional financial-crime issues may arise.

Companies should avoid making unsupported allegations and instead preserve transaction evidence for proper legal assessment.

Interview Employees Carefully

Employees in accounting, purchasing, finance and administration may possess important information.

Internal interviews should be documented appropriately, and employees should not be pressured to adopt a predetermined narrative.

Preserve Evidence Before Confronting the Manager

Immediately confronting the suspected manager can result in deletion of records or loss of access to information.

Evidence-preservation measures should therefore be considered before accusations are communicated.

Do Not Access Personal Accounts Unlawfully

The company may investigate its own corporate systems and records within applicable legal boundaries, but it should not unlawfully access the manager’s private email, banking or personal devices.

Improper evidence collection can create additional disputes.

The Manager Should Also Preserve Defense Evidence

If a manager is accused, they should preserve resolutions, emails, instructions from shareholders, contracts and records demonstrating the business purpose or authorization for disputed payments.

An internal disagreement should not automatically be transformed into a criminal accusation without examining both sides.

Shareholder Instructions Can Change the Case

A payment may initially appear unauthorized but later prove to have been instructed informally by the parent company or another authorized executive.

Review communications before reaching conclusions.

Business Judgment and Misappropriation Are Different

A bad investment, overpriced purchase or commercially unsuccessful transaction is not automatically criminal.

The key issue is whether the manager merely made a poor business decision or improperly diverted corporate assets.

Damages Must Be Calculated Accurately

The company should calculate actual loss transaction by transaction.

Do not automatically claim the entire value of a transaction if the company received some legitimate goods or services in return.

Interest and Additional Losses May Be Relevant

Depending on the legal basis of the recovery claim, interest and certain consequential losses may also require consideration.

Maintain financial records demonstrating when the company lost access to the funds.

Insurance Coverage Should Be Checked

The group should review any crime, fidelity, management liability or other potentially relevant insurance policies.

Notice requirements should be checked promptly.

Review Other Group Companies

If the manager had authority over several subsidiaries, determine whether similar payments occurred elsewhere.

A focused review may reveal whether the incident was isolated or part of a broader pattern.

Strengthen Internal Controls After the Incident

Foreign-owned subsidiaries can reduce future risk through dual authorization, payment thresholds, independent bank access, related-party approval rules and regular reconciliation of bank and accounting records.

No single manager should have uncontrolled authority over substantial corporate assets without appropriate oversight.

Immediate Action Plan for the Foreign Investor

When unauthorized payments are discovered, the foreign parent company should promptly preserve banking and accounting evidence, identify suspicious transactions, investigate beneficiaries, review the manager’s authority, secure corporate systems, implement legally valid changes to representation powers where necessary, notify banks, conduct a forensic review, evaluate criminal and civil proceedings, investigate assets and assess urgent interim measures.

Frequently Asked Questions

Is every unauthorized payment by a Turkish subsidiary manager a crime?

No. An unauthorized transaction can create corporate or civil liability without necessarily satisfying the elements of a criminal offense.

Can a manager be criminally liable for using company funds personally?

Potentially, depending on the circumstances, authority structure, intent and manner in which the funds were used.

Can the company immediately freeze the manager’s personal bank account?

Not merely by requesting it privately. Appropriate legal grounds and procedures are required for restrictions on another person’s account.

Should the manager be dismissed immediately?

That depends on the evidence and corporate circumstances. If removal is necessary, it should be implemented through legally valid corporate procedures.

Can payments to a manager’s related company be recovered?

Potentially, particularly where the underlying transaction was fictitious or the recipient was involved in the improper diversion. The facts and recipient’s legal position must be examined.

Can the company file both criminal and civil proceedings?

Potentially. Criminal liability and private-law recovery are distinct issues and may require separate procedural strategies.

What if the money was transferred abroad?

Cross-border asset tracing and recovery may be required. Banking and transaction information should be preserved immediately.

Are fake invoices important evidence?

Yes. If invoices do not correspond to genuine goods or services, they can be highly relevant to both asset-recovery and potential criminal issues.

What if the manager says the shareholder verbally approved the payments?

Emails, messages, witness evidence, previous practices and corporate records should be reviewed to determine whether authorization actually existed.

What should a foreign shareholder do first?

Preserve the evidence before confronting the suspected manager. Secure corporate banking and accounting records, map every suspicious payment and determine where the money went before deciding on criminal, corporate and asset-recovery measures.

Client-Focused Legal Support for Unauthorized Payments and Asset Recovery in Turkey

Unauthorized payments by a subsidiary manager can involve corporate governance, criminal investigations, breach of trust, fraud allegations, forged documents, bank transfers, related-party transactions, asset tracing and urgent recovery proceedings. Fırat Fesih Kaya Law Office assists foreign shareholders, international companies and foreign investors facing suspected misuse of assets within Turkish subsidiaries. Lawyer Fırat Fesih Kaya provides legal assistance in evidence preservation, internal investigations, criminal complaints and defense, corporate representation disputes, asset tracing, interim measures and civil recovery proceedings.

Phone: +90 312 434 22 22
Mobile: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No:221, Yıldırım Tower, Office No:148, 06520 Balgat, Çankaya, Ankara, Turkey