Foreign Investor Discovers Company Property Sold Below Value to an Insider: Can It Become a Criminal Case? (2026 Updated Guide)

A foreign investor discovers that company property in Turkey was sold below market value to a shareholder, director, relative or related company. Learn when the transaction may create criminal liability, how evidence can be preserved and what remedies investors can pursue.

A foreign investor may discover that valuable company property—such as real estate, vehicles, machinery, inventory or another corporate asset—was transferred to a shareholder, director, manager, relative or related company for a price significantly below its real value. Such a transaction can cause substantial losses to the company and its investors. However, selling company property below market value does not automatically constitute a criminal offence in Turkey. The legal consequences depend on matters such as who authorized the transaction, whether the decision-maker had authority, whether there was an undisclosed personal benefit, whether documents were manipulated, whether the purchase price was genuinely paid and whether the transaction formed part of a deliberate scheme to transfer company wealth to insiders. In serious cases, the facts may justify both corporate-law remedies and a criminal investigation.

Is Selling Company Property Below Market Value Automatically a Crime?

No. Companies can sometimes sell assets below an appraised or expected market value for legitimate commercial reasons. The company may need liquidity, the asset may require substantial repairs, there may be restrictions affecting its value or management may accept a discounted price as part of a genuine business decision.

A criminal allegation therefore requires more than simply showing that another buyer might have paid more.

When Does the Transaction Become Suspicious?

The transaction deserves closer examination where several factors appear together: a substantial difference between the sale price and actual market value, a purchaser connected with management, concealed relationships, unusual payment arrangements, absence of genuine negotiations, false corporate records or subsequent resale at a much higher price.

The complete transaction should be reconstructed.

Who Purchased the Property?

The identity of the buyer is one of the first issues to investigate. Determine whether the purchaser was a shareholder, director, manager, employee, relative of management or company controlled by one of those persons.

Indirect ownership should also be examined.

Related Companies Can Conceal the Real Beneficiary

The purchaser may appear independent on paper while ultimately being controlled by a company insider.

Corporate records, shareholder structures, management relationships and beneficial ownership evidence can therefore become important.

Obtain the Sale Agreement Immediately

Review the agreement governing the transfer. Determine the stated price, payment schedule, representations, delivery terms and persons signing for both sides.

Compare the agreement with board and shareholder records.

Was the Person Signing Authorized?

A director or manager does not necessarily have unlimited authority to dispose of every company asset under every circumstance.

The company’s articles, internal directives, signature circulars, board resolutions and other relevant corporate records should be examined.

Was Corporate Approval Required?

Depending on the company structure and transaction, corporate approvals may become relevant.

If a transaction was completed without an approval required by law, the articles of association or internal corporate arrangements, this can strengthen the investor’s challenge even where the issue does not ultimately become criminal.

Obtain an Independent Valuation

A large difference between the transaction price and market value can be an important factual indicator.

For real estate, consider obtaining a retrospective valuation addressing the property’s value as of the actual sale date rather than merely its current value.

Current Value Is Not Enough

Property values can change substantially.

The relevant comparison is normally between the sale price and the realistic value at the time of the transaction.

Examine Previous Valuation Reports

Management may already have possessed an appraisal showing a significantly higher value before approving the sale.

Such evidence can become important when evaluating whether decision-makers knew that the transaction was disadvantageous.

Was the Purchase Price Actually Paid?

A contract stating a particular amount does not prove that the company received that amount.

Review company bank accounts, accounting records, receipts and payment instructions.

Follow the Money

Determine where the purchase price came from and where it went.

If money appears to leave the purchaser and return indirectly through related persons or companies, a more detailed financial investigation may be necessary.

Cash Transactions Require Careful Examination

Large unexplained cash payments can make the factual record difficult to verify.

Accounting entries should be compared with bank records and the purchaser’s alleged payment evidence.

Was the Property Quickly Resold?

A rapid resale at a substantially higher price may be significant, particularly where the second sale occurred without material market changes or improvements to the property.

However, resale at a higher price alone does not automatically prove criminal conduct.

Did an Insider Receive the Difference?

The key question may be whether a director, manager or shareholder personally benefited from the transaction.

Bank transfers, commissions, consulting payments and transfers to relatives or related companies may become relevant.

Emails and Messages Can Be Important Evidence

Internal emails, messaging records and meeting communications may show how the transaction was arranged and whether management knew that the price was unusually low.

Evidence should be preserved lawfully.

Do Not Access Private Accounts Illegally

An investor should not attempt to obtain evidence through unauthorized access to another person’s email, telephone or private account.

Evidence-gathering methods can themselves create legal problems.

Preserve Company Records Before They Disappear

Where there is a genuine risk of evidence destruction, act promptly to preserve accounting records, corporate resolutions, contracts, invoices and legally accessible electronic records.

A clear document-preservation strategy can become crucial.

Can the Matter Constitute Breach of Trust?

Depending on the exact facts, the handling or disposal of company property by a person entrusted with authority over that property may raise questions under criminal-law provisions concerning breach of trust.

Whether the elements are satisfied requires case-specific analysis.

Fraud May Also Become Relevant

If the transaction involved deliberate deception, false representations or a scheme designed to obtain an unlawful benefit, fraud-related criminal issues may potentially arise.

A commercially bad transaction should not automatically be characterized as fraud; the alleged deceptive conduct must be identified specifically.

What If Corporate Documents Were Falsified?

False board resolutions, forged signatures, manipulated invoices or fabricated payment documents can materially change the nature of the case.

Potential document offences should be analyzed separately from the underlying asset transfer.

Forged Signatures Require Immediate Action

If the foreign investor’s signature or another authorized person’s signature appears on a document they did not sign, preserve the original document where possible and consider expert examination.

Do not write on or otherwise alter the disputed original.

Accounting Manipulation Can Become Important

A below-value transfer may be concealed through false invoices, fictitious expenses or inaccurate accounting entries.

Obtain the company’s general ledger, fixed-asset records and relevant transaction documentation.

Was the Sale Recorded Correctly in the Company’s Accounts?

Compare the contract price, accounting entry, bank receipt and any tax-related documentation.

Different figures across these records can require explanation.

Director and Manager Liability Is a Separate Issue

Even if criminal liability cannot be established, directors or managers may face civil or corporate liability where they breached duties owed to the company and caused loss.

Criminal and corporate remedies should therefore be considered separately.

A Bad Business Decision Is Not Automatically Criminal

This distinction is extremely important.

Criminal proceedings should not be used merely because shareholders disagree with management’s commercial judgment. Evidence of dishonest appropriation, deception, falsification or another criminal element may be necessary depending on the alleged offence.

Minority Shareholders Should Examine Their Corporate Rights

A foreign minority investor may have rights to obtain information, inspect relevant records, challenge corporate resolutions or pursue liability claims depending on the company structure and circumstances.

These remedies can be important even before a criminal complaint is considered.

Can the Sale Be Cancelled?

Potential civil or corporate remedies concerning the transaction depend on how the asset was transferred, the authority of the persons involved, the purchaser’s position and the legal defects alleged.

For real estate, title-register issues can make the analysis particularly important.

Real Estate Requires Separate Examination

If company-owned land, an office, factory, warehouse or apartment was transferred, obtain the title records showing the transaction date, purchaser, declared consideration and subsequent transfers.

The current registered owner should also be identified.

An Injunction May Be Urgent

If the property remains with the insider but there is a risk of further transfer, an interim measure may need to be considered.

Speed can be important because subsequent transfers can complicate recovery.

Vehicles, Machinery and Inventory Require Different Evidence

For vehicles, registration and sales records may be central. For machinery, serial numbers, invoices and fixed-asset records should be preserved. For inventory, warehouse and stock records may be required.

The evidence strategy should reflect the type of asset.

Can a Foreign Investor File a Criminal Complaint?

Potentially. Foreign nationality does not prevent an investor from reporting suspected criminal conduct to Turkish authorities.

The complaint should explain concrete conduct and supporting evidence rather than merely stating that the company suffered a loss.

What Should the Criminal Complaint Include?

A structured complaint can identify the asset, ownership, transaction, decision-makers, buyer, relationship between the parties, market-value evidence, payment records, alleged personal benefit and any false or manipulated documents.

Supporting documents should be organized chronologically.

Prosecutors May Examine Bank Records

Where legally relevant and authorized within the investigation, financial records may become important in determining whether money was genuinely paid and who ultimately benefited.

The investor should identify suspicious transactions as precisely as possible.

Expert Examination May Be Required

The investigation may involve accounting, valuation, handwriting, corporate or technical expertise.

A private expert assessment prepared before filing can sometimes help clarify complicated facts, although it does not replace official expert examination.

Can Company Property Be Frozen or Seized?

Depending on the alleged offence, evidence and procedural requirements, protective measures concerning relevant property may become an issue in a criminal investigation.

Such measures are not automatic merely because a complaint has been filed.

Can the Purchaser’s Property Be Frozen?

Again, this depends on the alleged offence and applicable procedural conditions.

The investor should distinguish between preserving the disputed company asset and attempting to secure a future civil claim against another person’s general assets.

Criminal Proceedings Do Not Automatically Return the Asset

Even where a criminal investigation begins, separate civil, commercial or corporate proceedings may still be necessary to recover property, challenge the transaction or obtain compensation.

A coordinated strategy is therefore usually preferable.

Parallel Civil and Criminal Proceedings May Be Necessary

The same factual transaction can create several distinct legal issues: criminal responsibility of individuals, liability of directors or managers, validity of corporate decisions, recovery of the asset and compensation for company losses.

Each route has different objectives and evidentiary requirements.

Calculate the Company’s Actual Loss

Do not simply subtract the contract price from today’s market value.

A proper loss analysis should consider the asset’s value at the relevant date, money actually received, transaction costs and other circumstances affecting the company’s financial position.

Avoid Double Recovery

If the asset is successfully recovered, the calculation of remaining financial loss may change.

Civil claims should therefore be coordinated with any restitution achieved through other proceedings.

What If the Foreign Investor Bought the Company After the Sale?

Due diligence becomes particularly important.

Determine whether the disputed transaction occurred before acquisition, whether it was disclosed during the sale process and whether representations or warranties in the share purchase agreement were breached.

The Seller of the Company May Also Face Contractual Claims

If former shareholders concealed the below-value asset transfer during an acquisition, the investor should review warranties concerning assets, related-party transactions, financial statements and undisclosed liabilities.

This contractual claim is separate from potential criminal liability.

Review Related-Party Transactions Across the Company

Discovery of one suspicious sale may justify a targeted examination of other transactions involving the same insiders.

Look for property transfers, consulting payments, loans, asset leases and unusual transfers to related companies.

Do Not Assume Every Related-Party Transaction Is Illegal

Companies legitimately transact with shareholders, directors and affiliates.

The relevant questions are whether the transaction was properly authorized, transparently recorded, commercially explainable and consistent with applicable duties.

Build a Transaction Timeline

Create a chronology showing valuation, negotiations, corporate approvals, signing, payment, registration, delivery and any subsequent resale.

A timeline frequently reveals inconsistencies that are difficult to identify from individual documents.

Immediate Action Plan for the Foreign Investor

The investor should immediately preserve company records, obtain the sale agreement and corporate approvals, identify the ultimate purchaser, secure historical valuation evidence, examine bank and accounting records, investigate whether the price was actually paid, preserve lawful electronic evidence, check subsequent transfers, consider urgent measures against further disposal and evaluate corporate, civil and criminal remedies together.

Frequently Asked Questions

Is selling company property below market value automatically a crime in Turkey?

No. A below-market transaction alone does not automatically establish criminal liability. The reasons for the transaction, authority, intent, personal benefit and surrounding evidence must be examined.

What if the buyer is the director’s relative?

That relationship can justify closer scrutiny but does not by itself prove criminal conduct.

How can the investor prove the property was sold too cheaply?

A retrospective independent valuation addressing the asset’s value at the transaction date can be particularly useful.

What if the contract says the full price was paid?

Bank and accounting records should be examined to determine whether the company actually received the stated consideration.

Can breach of trust become relevant?

Potentially, depending on how company property was entrusted and disposed of and whether the statutory elements of the offence are satisfied.

What if board documents were forged?

Possible document offences should be examined separately, and original documents should be preserved for potential expert analysis.

Can the foreign shareholder file a criminal complaint in Turkey?

Potentially, yes. The appropriate complainant and procedure depend on the alleged offence and factual circumstances.

Can the property be prevented from being sold again?

Depending on the circumstances and legal proceeding, interim protective measures may be considered. This issue should be evaluated urgently if another transfer is expected.

Should the investor file only a criminal complaint?

Not necessarily. Corporate, commercial and civil remedies may be necessary to recover the asset or obtain compensation even if criminal proceedings are initiated.

What should the investor do first?

Preserve the evidence before confronting the suspected insiders. Obtain the transaction documents, historical valuation, corporate approvals, bank records and information concerning the buyer and subsequent transfers. The legal strategy should then distinguish a merely unfavorable commercial transaction from deliberate diversion of company assets for an insider’s benefit.

Client-Focused Legal Support for Foreign Investors Facing Insider Asset Transfers

A below-value transfer of company property can involve director and manager liability, related-party transactions, breach of trust allegations, fraud, forged documents, accounting manipulation, asset recovery, interim measures and shareholder disputes. Fırat Fesih Kaya Law Office assists foreign investors and international shareholders facing suspected diversion or unauthorized disposal of company assets in Turkey. Lawyer Fırat Fesih Kaya provides legal assistance in preserving evidence, examining corporate and financial records, preparing criminal complaints where supported by the facts, pursuing asset-recovery and compensation proceedings and coordinating parallel corporate, commercial and criminal remedies.

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