Company Assets Secretly Transferred to Related Parties in Turkey: Criminal Risks for Directors (2026 Updated Guide)

Company assets are secretly transferred to shareholders, relatives or related companies in Turkey. Learn when directors may face criminal investigation, which evidence matters, and how foreign shareholders and executives should respond.

Secret transfers of company money, real estate, vehicles, inventory, receivables or other valuable assets to directors, shareholders, relatives or related companies can create significantly more than an ordinary commercial dispute in Turkey. Depending on the facts, transactions that appear in accounting records as a sale, loan, consultancy payment or intercompany transfer may be investigated to determine whether company assets were deliberately diverted for private benefit. For foreign investors, shareholders and company directors, the crucial distinction is between a genuine related-party commercial transaction and a transaction allegedly designed to remove value from the company unlawfully. Criminal responsibility is not automatic merely because assets were transferred to a related party; the legal characterization depends on the transaction, authority, intent, consideration, accounting treatment, corporate approvals and resulting loss.

When Can a Related-Party Asset Transfer Become a Criminal Matter?

A company may legitimately transact with shareholders, directors, subsidiaries, affiliates and other related parties. The existence of a relationship alone does not establish a crime.

Criminal concerns can arise where evidence suggests that company property was intentionally diverted, concealed, misappropriated or transferred through fictitious transactions without a legitimate corporate purpose.

What Types of Assets May Be Involved?

Investigations can concern bank balances, real estate, vehicles, machinery, inventory, intellectual property, receivables, shares, securities or other economically valuable company rights.

Authorities may examine both direct transfers and transactions that indirectly remove value from the company.

Transfers to Relatives Can Receive Particular Scrutiny

A director may arrange for company property to be transferred to a spouse, sibling, child, parent or another closely connected person.

The family relationship does not itself establish illegality, but authorities may investigate whether the recipient was genuinely independent or merely used to hold assets for another person.

Related Companies Can Also Be Examined

Asset transfers between companies under common ownership are common in legitimate corporate groups.

However, investigators may examine whether the recipient company actually provided goods, services or equivalent value in return.

Sale Below Market Value Can Create Risk

Suppose a valuable company property is sold to a director’s related company for substantially less than its genuine economic value.

Investigators may examine the valuation, negotiations, payment records, corporate approvals and commercial justification to determine whether the transaction was genuine.

A Paper Sale Is Not Necessarily a Genuine Sale

A contract and invoice do not automatically establish commercial reality.

If the purchase price was never paid, immediately returned, offset through artificial accounting entries or financed using the selling company’s own funds, the underlying transaction may receive additional scrutiny.

Fictitious Consultancy Agreements Can Be Investigated

Payments to related parties described as consultancy, management, commission or advisory fees can create risk where no genuine service was performed.

The company should be able to demonstrate what service was provided, by whom, when and for what commercial purpose.

Director Loans Require Documentation

Payments recorded as shareholder or director loans should correspond with genuine legal and accounting arrangements.

Unexplained withdrawals followed by retrospective characterization as loans may become particularly problematic during a criminal investigation.

Company Credit Cards and Personal Expenses

Use of company funds for personal travel, luxury purchases, family expenses or unrelated private costs may also be examined.

The criminal consequences depend on the surrounding facts rather than merely the accounting label used for the payment.

Who Can Be Investigated?

Potential subjects can include directors, managers, shareholders, employees involved in the transactions and recipients of the assets.

However, criminal responsibility in Turkey is personal. A director should not be treated as criminally liable solely because of their corporate title.

Can Every Board Member Be Criminally Liable?

No automatic rule should be assumed.

Investigators should examine each person’s authority, knowledge, participation and conduct. A board member who neither participated in nor knew about a concealed transfer presents a different factual position from the person who designed and executed it.

Signature Authority Can Be Important

Investigators may examine who signed the contract, approved the bank transfer, instructed accounting personnel or authorized the asset disposition.

Signature authority can be important evidence, but it should still be considered together with the complete decision-making process.

Bank Records Are Often Central Evidence

Bank statements can show where company money actually went.

Investigators may reconstruct transfers between the company, directors, relatives and related businesses to determine whether funds ultimately returned to the person accused of benefiting from the transaction.

Follow the Money

Complex cases often require transaction-by-transaction analysis.

A payment may pass through several companies or individuals before reaching its final destination. A chronological financial-flow chart can therefore become important for both prosecution and defense.

Accounting Records Can Help or Hurt the Defense

General ledgers, invoices, journals and financial statements may demonstrate that a transaction was transparently recorded.

Conversely, unexplained accounting entries, inconsistent descriptions or retroactive records may create additional questions.

Corporate Approvals Should Be Preserved

Board resolutions, shareholder decisions, internal approvals and authorization documents may help demonstrate how and why a transaction occurred.

However, formal approval does not automatically make an unlawful transaction lawful if the underlying purpose was improper.

Market Valuation Can Become Crucial

Where the dispute concerns whether an asset was sold too cheaply, contemporaneous valuation evidence can be highly important.

Real estate appraisal reports, comparable sales, machinery valuations and independent financial analysis may help determine whether the price was commercially defensible.

Commercial Necessity Should Be Documented

A company may sell assets quickly because it needs liquidity, is restructuring operations or is exiting a business segment.

If this explains a below-expected price, contemporaneous records can be important.

Related-Party Transactions Should Have a Business Rationale

The company should be able to explain why the transaction was undertaken with the related party rather than an unrelated third party.

Pricing methodology and contractual terms should also be documented.

Emails and Messages Can Become Evidence

Emails, internal messaging systems and other communications may reveal who proposed the transaction and why.

Foreign executives should assume that relevant business communications may later become part of a criminal or commercial investigation.

Deleting Messages Can Make the Situation Worse

Once a dispute or investigation is anticipated, destroying records can create serious evidentiary problems.

Relevant documents and electronic communications should be preserved.

Foreign Directors May Be Summoned for Statements

A foreign company director in Turkey may be asked to give a statement as a suspect or may initially be approached for information concerning company transactions.

Before giving a substantive statement, the person should understand their procedural status and allegations.

Interpreter Rights Matter

A foreign suspect who cannot sufficiently understand Turkish should ensure that the criminal proceedings are properly interpreted.

Important statements should never be signed without understanding their contents.

Do Not Sign an Inaccurate Statement

The person should carefully review the written record before signing.

If the translation or written summary does not accurately reflect what was said, the discrepancy should be raised immediately.

Search and Seizure May Occur

Depending on the investigation and judicial decisions obtained, authorities may seek company records, computers, phones, accounting data and other evidence.

The legality and scope of the measure should be reviewed separately.

Company Bank Accounts May Be Examined

Financial investigations can extend to company and personal bank records where authorities believe they are relevant to tracing allegedly transferred assets.

The defense should distinguish legitimate commercial payments from transactions relied upon as evidence of diversion.

Asset-Freezing Measures Can Create Immediate Commercial Problems

Where precautionary measures affect company property or accounts, ordinary business operations can be disrupted.

Available objections or requests for modification of the measure should be evaluated urgently according to the particular decision.

Criminal and Commercial Cases Can Run Simultaneously

A shareholder may file a commercial claim concerning director liability while a prosecutor investigates the same transactions.

The two proceedings have different purposes and should be coordinated carefully.

Director Liability Claims Are Different From Criminal Liability

A director can potentially face civil or corporate liability for causing company loss without necessarily having committed a criminal offense.

A breach of corporate duties should not automatically be equated with criminal conduct.

Tax Consequences May Also Arise

Related-party transfers can raise separate questions involving corporate taxation, transfer pricing, disguised profit distributions or other tax issues.

Tax treatment and criminal characterization should be analyzed independently.

Creditor Claims Can Add Another Layer

Transfers made while a company faces substantial debts may also be challenged by creditors through applicable enforcement and insolvency mechanisms.

The existence of creditor claims can therefore significantly broaden the dispute.

Foreign Shareholders Should Secure Evidence Quickly

If a foreign investor discovers suspicious asset transfers, it should preserve bank records, corporate books, resolutions, contracts, invoices, title records and communications.

Delay can make reconstruction of the transactions more difficult.

Obtain the Company Books

Accounting records may reveal transactions that were not disclosed to shareholders through ordinary reporting.

The relevant legal procedure for obtaining company records will depend on the investor’s position and corporate structure.

Real Estate Transfers Should Be Investigated Separately

If company real estate was transferred, obtain the relevant title and transaction information and compare the transfer price with contemporaneous market evidence.

The purchaser’s relationship with company insiders should also be examined.

Vehicle and Machinery Transfers Can Be Traced

Registration records, invoices, payment information and subsequent resale transactions may help determine what happened to valuable movable assets.

Receivables Can Also Be Diverted

A company does not need physically to transfer cash for value to disappear.

A director may allegedly assign receivables, waive debts or redirect customer payments to another entity. These transactions should be included in any asset review.

Intellectual Property Should Not Be Forgotten

Trademarks, software, licenses and other intellectual-property rights may carry substantial value.

Transfers to related companies should therefore be examined alongside physical assets.

What Should an Accused Director Do First?

The director should identify the exact transactions under investigation and obtain the underlying records.

A defense should be built transaction by transaction rather than through a general assertion that all company dealings were legitimate.

Reconstruct the Decision-Making Process

For each disputed transaction, identify who proposed it, who negotiated it, who approved it, who signed it, how the price was determined, how payment occurred and what benefit the company received.

This chronology can become central to the defense.

Separate the Director From Decisions They Did Not Make

In companies with several managers, responsibilities may be divided.

Organizational charts, delegated authorities, signature circulars, board resolutions and internal correspondence may demonstrate who actually controlled the disputed transaction.

Independent Expert Analysis Can Be Valuable

Complex financial cases may require forensic accounting or valuation expertise.

An expert can help reconstruct money flows, compare transaction values and identify whether alleged company losses are supported by financial evidence.

Foreign Investors Should Consider Parallel Asset Protection

Where there is evidence that disputed assets may be transferred again, urgent civil or commercial measures may need to be evaluated separately from the criminal complaint.

A criminal investigation should not automatically be treated as a substitute for protecting recoverable assets.

Can Transferred Assets Be Recovered?

Potentially, depending on the transaction and available civil, commercial, enforcement or criminal procedures.

Recovery strategy should identify both the original recipient and any subsequent transfers.

Third-Party Rights Must Be Considered

If property has subsequently been transferred to an unrelated third party, that person’s legal position may affect recovery.

The transaction chain should therefore be investigated quickly.

Do Not Treat Every Related-Party Transaction as Fraudulent

This is particularly important for foreign investors reviewing Turkish subsidiaries.

Corporate groups legitimately use intercompany loans, shared services, asset transfers and centralized procurement. The legal analysis should distinguish questionable transactions from ordinary group operations.

Warning Signs That Require Closer Review

Particular attention may be appropriate where assets were transferred immediately before litigation, the recipient is controlled by the director, no meaningful consideration was paid, documents were created retrospectively, the transaction was hidden from shareholders, company records contain contradictory explanations or funds ultimately returned to the person controlling the transaction.

None of these facts should be evaluated in isolation.

Immediate Defense Strategy for Directors

A director facing investigation should obtain the complaint and relevant investigation information to the extent legally accessible, identify each disputed transaction, preserve electronic and accounting evidence, reconstruct corporate approvals, document commercial purpose, obtain valuation evidence, trace payments, identify other decision-makers and prepare for any police or prosecutor statement with appropriate legal assistance.

Immediate Strategy for Foreign Shareholders

A foreign shareholder who suspects asset diversion should preserve evidence, identify all transferred assets, reconstruct bank movements, investigate related-party relationships, secure corporate records, obtain independent valuations, evaluate urgent asset-protection measures and coordinate commercial, criminal and enforcement strategies.

Frequently Asked Questions

Is transferring company property to a related company automatically a crime?

No. Related-party transactions can be legitimate. The purpose, authority, consideration, documentation and surrounding circumstances must be examined.

Can a director be investigated for selling company property below market value?

Potentially. Investigators may examine whether the price was commercially justified or whether the transaction was intended to divert company value.

Are all board members responsible?

Criminal responsibility is personal. Each person’s knowledge, authority and participation should be evaluated separately.

Can bank transfers be used as criminal evidence?

Yes. Financial records can be important in reconstructing the movement and ultimate destination of company funds.

Can a shareholder report suspicious transfers to prosecutors?

Potentially, where the facts indicate possible criminal conduct. The evidence and appropriate legal characterization should be evaluated carefully.

Can a criminal investigation freeze company or personal assets?

Precautionary measures may potentially arise where the legal requirements are satisfied. The specific decision and available objections should be examined urgently.

Can transferred assets be recovered?

Potentially. Depending on the facts, civil, commercial, enforcement and criminal procedures may become relevant.

Is a board resolution enough to protect a director?

Not necessarily. Formal approval is important evidence but does not automatically resolve whether the underlying transaction was lawful.

Can foreign directors be personally investigated in Turkey?

Yes, where authorities consider that there is a factual and legal basis concerning the individual’s own conduct. Corporate position alone, however, should not automatically establish personal criminal responsibility.

What is the most important evidence?

The strongest defense or claim usually comes from reconstructing the complete transaction: corporate authority, commercial purpose, valuation, contract, accounting treatment, payment flow, recipient relationship and ultimate destination of the asset.

Client-Focused Legal Support for Company Asset Transfer and Director Investigations

Allegations involving secret company asset transfers can develop simultaneously into criminal investigations, shareholder disputes, director-liability proceedings, asset-freezing measures, commercial litigation and recovery claims. Fırat Fesih Kaya Law Office assists foreign investors, shareholders, directors and international companies facing complex corporate and criminal disputes in Turkey. Lawyer Fırat Fesih Kaya provides legal assistance in investigating disputed transactions, preparing criminal defenses, tracing company assets, coordinating financial evidence, challenging precautionary measures and pursuing appropriate proceedings for recovery of company property.

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