Energy Company Assets Transferred to Related Parties in Turkey: How Can Foreign Shareholders Challenge the Transaction? – 2026 Updated Guide

Has a Turkish energy company transferred assets to a controlling shareholder, affiliate or related party? Learn how foreign shareholders can challenge related-party transactions, request a special audit, pursue director liability, seek compensation and protect energy project assets under Turkey’s 2026 legal framework.

Foreign investors participating in Turkish energy companies may discover that valuable company assets have been sold, leased, transferred or otherwise made available to businesses connected with the controlling shareholder, directors or local joint venture partner. These transactions can significantly reduce the economic value of a solar, wind, electricity storage, hydroelectric or other energy investment, particularly where assets are transferred below market value or without a legitimate commercial justification.

The problem can extend far beyond the transfer of physical equipment. Related-party transactions may involve project land, receivables, electricity revenues, cash, shareholder loans, vehicles, intellectual property, development rights, construction contracts, management services or other economically valuable rights. A controlling shareholder may also attempt to shift profitability from the energy company to another company within the same corporate group through excessive management fees, inflated procurement contracts or commercially unfavorable arrangements.

Turkish corporate law provides foreign shareholders with several potential remedies. Depending on the circumstances, these may include information and inspection rights, a special audit, challenges to corporate resolutions, director liability claims, compensation for losses caused by unlawful exercise of control and urgent interim judicial protection.

For energy companies, however, the corporate analysis must also be coordinated with the regulatory framework. The Electricity Market Licensing Regulation was amended again on April 29, 2026, including provisions affecting restructuring and transactions involving licensed entities. This makes it particularly important to examine corporate, contractual and energy-regulatory consequences together. (Kesikli Avukatlık Bürosu)

What Is a Related-Party Transaction?

A related-party transaction broadly involves a transaction between the company and a person or entity having a relevant relationship with the company, its controlling shareholder, directors or corporate group.

The fact that a transaction involves a related party does not automatically make it unlawful.

Energy companies often legitimately transact with affiliated businesses. A corporate group may use centralized engineering, procurement, management, financing or technical services. An affiliate may own equipment or property genuinely needed by the project.

The legal problem arises when the relationship is used to transfer value away from the company, prejudice minority shareholders or cause the company to enter a transaction it would not reasonably have accepted with an independent third party.

The commercial terms of the transaction therefore matter enormously.

How Can Value Be Transferred Out of an Energy Company?

The most obvious example is the sale of a valuable company asset to an affiliate for substantially less than fair market value.

However, value extraction can be considerably more sophisticated.

A controlling shareholder may cause the project company to pay excessive consultancy or management fees to another group company. Equipment may be purchased from an affiliate at an inflated price. Company property may be leased to a related party below market value. Loans may be extended without adequate interest or security. Valuable receivables may be assigned on unfavorable terms.

The energy company may also provide guarantees or other security supporting debts that primarily benefit another group company.

Turkish Commercial Code Article 202 expressly addresses unlawful use of control within corporate groups and identifies conduct such as transfers of businesses, assets, funds, personnel, receivables and debts, profit transfers, guarantees and other transactions capable of causing loss to a dependent company.

Unlawful Exercise of Control Under Turkish Commercial Law

Article 202 of the Turkish Commercial Code can become particularly important where the energy company is controlled by another company.

The legislation provides that a controlling company may not exercise its control in a manner that causes the dependent company to suffer loss unless the loss is properly compensated within the statutory framework. The rule expressly addresses asset and fund transfers and other transactions capable of prejudicing the dependent company.

This can be highly relevant to a foreign minority shareholder.

Suppose a controlling corporate shareholder causes the energy company to sell valuable equipment to another group company for EUR 5 million even though an independent valuation indicates that the equipment is worth EUR 8 million. The resulting EUR 3 million economic disadvantage cannot simply be ignored because both companies belong to the same corporate group.

The transaction must be examined from the perspective of the affected company’s interests and the statutory corporate-group rules.

Compensation of the Company’s Loss

Turkish law also addresses whether losses caused by the controlling relationship have been compensated.

Under Article 202, where the relevant loss is not actually compensated within the financial year or the dependent company is not granted an equivalent claim in accordance with the statutory requirements, shareholders may potentially seek compensation from the controlling company and the directors responsible for causing the loss.

This remedy can be particularly valuable for foreign minority investors that do not control the company’s board.

The court may also have alternative remedial possibilities in appropriate circumstances under the statutory framework, including solutions concerning the claimant shareholder’s shares.

The precise remedy must nevertheless be determined according to the facts and corporate structure of the particular investment.

Can the Foreign Shareholder Challenge the Asset Transfer?

Potentially, but the appropriate legal claim depends on how the transaction was approved and implemented.

The shareholder should first identify which corporate body approved the transaction. It may have been approved by the board of directors, general assembly, managing directors or authorized company representatives.

The investor should then examine whether the decision complied with the Turkish Commercial Code, articles of association, shareholders’ agreement and internal governance arrangements.

If the shareholders’ agreement classifies material asset transfers or related-party transactions as reserved matters requiring the foreign investor’s approval, proceeding without that approval may also constitute a contractual breach.

However, a contractual breach does not automatically mean that the transaction with the third party is legally ineffective.

The corporate, contractual and third-party consequences should therefore be analyzed separately.

Board Members and Conflicts of Interest

Board conduct should be examined closely whenever an asset is transferred to a company connected with directors or controlling shareholders.

Directors are subject to statutory duties and conflict-related rules under Turkish corporate law. The Turkish Commercial Code also regulates transactions involving directors and the company, while board members may face liability where breaches of their duties cause compensable loss. (Turkcell)

The investor should therefore investigate who proposed the transaction, who negotiated its commercial terms, whether independent valuation was obtained, which directors participated in the decision and whether any director had an economic interest in the related entity.

Minutes of the relevant board meetings can become crucial evidence.

Can Directors Be Personally Liable?

Potentially.

If directors breach their statutory or contractual duties and cause damage, director liability may arise under the Turkish Commercial Code.

Article 555 provides that both the company and individual shareholders may seek compensation for loss suffered by the company, although a shareholder pursuing the company’s loss generally requests payment of the compensation to the company rather than personally.

This distinction is fundamental.

If an energy company’s EUR 10 million asset is improperly transferred for EUR 6 million, the immediate EUR 4 million loss generally belongs to the company. The foreign shareholder suffers economically because the value of its shares decreases, but that does not automatically convert the company’s loss into a personal claim for EUR 4 million.

The legal strategy must therefore identify whether the damage is direct shareholder loss or corporate loss.

Right to Information and Inspection

Foreign shareholders frequently discover related-party transactions only after access to information becomes restricted.

The first step may therefore be exercising shareholder information and inspection rights.

The investor may need financial statements, general ledger records, board resolutions, contracts, invoices, payment records, valuations and correspondence concerning the related-party transaction.

Information requests should be specific.

A targeted request concerning a particular asset transfer, contract or payment will generally be more useful than an extremely broad demand for every company document.

The shareholder should also preserve evidence of any refusal to provide information.

Special Audit: A Powerful Remedy for Foreign Shareholders

A special audit can become particularly important where the foreign investor suspects misconduct but lacks access to sufficient internal evidence.

Articles 438 to 444 of the Turkish Commercial Code establish the special audit mechanism for joint stock companies. Each shareholder may request clarification of particular events through a special audit where this is necessary to exercise shareholder rights and the relevant statutory requirements are satisfied. (GSI Attorney Partnership)

This can be particularly useful for related-party transactions.

The shareholder might seek examination of a specific asset sale, payments to an affiliate, a suspicious management agreement or transfers of project funds.

The special audit mechanism is designed around identifiable matters rather than unrestricted investigation of the company’s entire history.

What If the General Assembly Rejects the Special Audit?

Rejection by the general assembly does not necessarily end the process.

Under Article 439 of the Turkish Commercial Code, qualifying shareholders can apply to the competent commercial court for appointment of a special auditor where the general assembly rejects the request. The statute establishes specific shareholding or nominal-value thresholds and a three-month application period. (Türk Hukuk Sitesi)

For a foreign minority investor excluded from management, this can provide an important route to independent investigation.

A 2026 legal analysis of the special audit mechanism likewise emphasizes its role as a corporate transparency and minority-shareholder protection tool. (GSI Attorney Partnership)

Challenging General Assembly Resolutions

Some related-party transactions require or receive general assembly approval.

Where a general assembly resolution violates applicable law, the articles of association or relevant shareholder protections, the foreign investor should assess whether the resolution can be challenged.

Timing is crucial because statutory deadlines may apply.

The investor should not wait until the asset has been transferred several times or the proceeds have disappeared before investigating available remedies.

Where the transaction has not yet been completed, urgent judicial protection may also be considerably more effective than a later damages claim.

Can the Asset Transfer Be Stopped Before Completion?

Potentially.

If the investor learns that a valuable asset is about to be transferred and there is a serious risk of irreversible harm, an interim injunction may need to be considered.

The shareholder must satisfy the applicable procedural requirements and present sufficient evidence supporting the requested provisional protection.

The requested measure should be carefully targeted.

For example, preventing disposal of a particular disputed asset may be more proportionate than freezing every commercial activity of an operational energy company.

This distinction matters because the project company must continue paying employees, taxes, lenders, maintenance contractors and other essential expenses.

What If the Asset Has Already Been Transferred?

The legal strategy becomes more complicated once the transaction has been completed.

Potential remedies may include director liability, claims against controlling entities, compensation actions, challenges to relevant corporate resolutions and contractual claims under the shareholders’ agreement.

Whether the underlying asset itself can be recovered depends on the legal structure of the transaction, the transferee’s position, good faith considerations and other applicable rules.

Foreign shareholders should therefore avoid assuming that every completed related-party transaction can simply be reversed.

In some cases, financial compensation may become the more realistic remedy.

Independent Valuation Can Be Decisive

Many related-party disputes ultimately depend on valuation.

If a company sold land, equipment or another asset for EUR 10 million, the investor cannot establish loss merely by asserting that the asset was worth EUR 15 million.

Independent valuation may be necessary.

For energy assets, valuation can be complex because economic value may depend on remaining operating life, electricity generation, equipment condition, grid connection, regulatory status and future cash flows.

Technical experts and forensic accountants may therefore need to work together.

Related-Party Contracts Can Also Transfer Profit

Not all value extraction involves asset ownership.

A controlling shareholder may preserve the company’s assets while transferring its profits through service agreements.

For example, an affiliate may charge excessive development, management, procurement or O&M fees.

Turkish Commercial Code Article 202 expressly recognizes that unlawful exercise of control can involve reducing or transferring the dependent company’s profit and directing it to make payments or undertake obligations that cause loss.

Foreign investors should therefore examine cash flows, not merely asset registers.

Special Rules for Publicly Held Energy Companies

Where the energy company is publicly held, capital markets legislation can impose additional related-party transaction requirements.

The Capital Markets Board’s Corporate Governance Communiqué contains specific rules concerning related-party transactions, including board procedures and transaction thresholds in relevant circumstances. (LEXPERA)

These requirements do not automatically apply to every privately held energy project company.

The company’s capital markets status must therefore be established before relying on these additional protections.

Why Energy Companies Require Additional Regulatory Analysis

Energy companies operate in a regulated sector, meaning an asset transfer can have consequences beyond ordinary corporate law.

The transferred asset may form an essential part of the licensed generation facility. A restructuring may affect license obligations, project financing or grid arrangements.

The April 29, 2026 amendments to the Electricity Market Licensing Regulation further revised provisions concerning transactions and restructuring involving license holders, including mergers, demergers, sales, leases and certain project-finance-related structures. (Kesikli Avukatlık Bürosu)

A corporate transaction should therefore be examined not only for shareholder fairness but also for EMRA compliance.

2026 Rules Make Control Analysis Particularly Important

Foreign investors should also pay close attention to changes affecting ownership and control of energy companies.

Rules tightened in 2025 concerning shareholding changes in entities holding preliminary licenses. Certain changes involving foreign shareholders and pre-emption rights that were previously treated as exceptions are now conditioned on the absence of a change of control, while specified transactions can require prior EMRA approval. (Erdem Erdem Avukatlık Bürosu)

These rules remain relevant to the 2026 regulatory environment.

A controlling shareholder attempting to reorganize project assets or ownership during a shareholder dispute should therefore be examined for both corporate and licensing compliance.

Can the Foreign Shareholder Exit Instead?

Sometimes restoring trust is no longer commercially realistic.

The shareholders’ agreement may contain put options, buy-sell mechanisms, tag-along rights or deadlock procedures that provide an exit.

Corporate-group liability rules can also provide additional remedial possibilities in appropriate circumstances. Under Article 202, the court may in certain cases consider purchase of the claimant shareholders’ shares or another acceptable solution instead of compensation.

Valuation becomes critical in such circumstances.

The foreign shareholder should avoid allowing an unlawful related-party transaction to depress the company valuation immediately before an exit price is determined.

Arbitration and Commercial Litigation

Shareholders’ agreements involving international energy investors frequently contain arbitration clauses.

The investor should therefore identify whether claims arise under the shareholders’ agreement, Turkish corporate law or both.

Contractual claims may be subject to arbitration, while corporate claims can require separate jurisdictional analysis.

The dispute strategy should be mapped before proceedings begin rather than filing multiple inconsistent actions.

Urgent interim relief may also require coordination between arbitral proceedings and Turkish courts depending on the circumstances.

Evidence Foreign Investors Should Preserve Immediately

Evidence preservation is essential.

The foreign shareholder should secure all corporate records already lawfully available to it, including shareholders’ agreements, articles of association, board minutes, general assembly resolutions, contracts, financial statements, management reports and correspondence.

Particular attention should be paid to invoices, payment records, valuation reports and documents showing relationships between the company and the transferee.

The investor should also preserve evidence concerning the asset’s condition and value before transfer.

If the transaction involves equipment or a power plant asset, independent technical evidence may be required in addition to accounting records.

Frequently Asked Questions

1. Can a Turkish energy company legally sell assets to its controlling shareholder’s affiliate?

Yes, a related-party transaction is not automatically unlawful. However, the transaction must comply with applicable corporate law and governance requirements. Transactions that improperly cause loss to a dependent company can trigger significant remedies under Turkish law.

2. Can a foreign minority shareholder challenge a below-market asset transfer?

Potentially, yes. Available remedies may include challenging corporate resolutions, requesting a special audit, pursuing director liability and invoking corporate-group liability provisions depending on the facts.

3. Can the foreign shareholder recover the company’s financial loss personally?

Not always. Where the loss belongs to the company, Article 555 allows shareholders to pursue compensation for corporate loss, but the requested compensation is generally payable to the company.

4. Can a foreign shareholder request a special audit?

Potentially, yes. Articles 438–444 of the Turkish Commercial Code provide a special audit mechanism subject to statutory requirements. (GSI Attorney Partnership)

5. What happens if the majority shareholder rejects the special audit?

Qualifying minority shareholders may apply to the competent commercial court within the statutory period if the applicable requirements are satisfied. (Türk Hukuk Sitesi)

6. Can directors be personally liable for an abusive related-party transaction?

Potentially. Director liability may arise where statutory duties are breached and compensable loss results. The specific conduct, damage, causation and applicable defenses must be examined.

7. Can the investor stop the asset transfer before it happens?

Potentially, where the requirements for interim judicial protection are satisfied. Acting before completion can be significantly more effective than attempting recovery afterward.

8. Do EMRA rules matter in a related-party asset transfer?

Potentially, yes. Energy companies operate under sector-specific licensing rules, and certain asset transfers, restructuring transactions or control changes may have regulatory consequences. The Electricity Market Licensing Regulation was amended again in April 2026. (Kesikli Avukatlık Bürosu)

9. What should a foreign shareholder do immediately after discovering a suspicious asset transfer?

The investor should preserve corporate and financial evidence, determine whether the transfer has already closed, obtain an independent valuation where necessary, exercise information rights, review the shareholders’ agreement and assess whether urgent judicial protection is required.

10. Can the foreign shareholder seek an exit instead of continuing the dispute?

Potentially. Contractual exit rights, deadlock mechanisms and certain statutory remedies may provide alternatives to prolonged shareholder litigation. The company should be independently valued before an exit is negotiated.

Legal Support for Foreign Shareholders Challenging Related-Party Transactions in Turkey

Related-party transactions can rapidly destroy the economic value of a foreign investment when company assets, cash flows or profits are transferred away from an energy project on commercially unfavorable terms. Early action is particularly important where the transaction has not yet been completed or where additional transfers may follow.

Fırat Fesih Kaya Law Office provides legal assistance to foreign shareholders, international energy investors and joint venture partners in related-party transaction disputes, asset diversion claims, minority shareholder protection, special audit proceedings, director liability, unlawful exercise of control, interim injunctions, shareholder exits, arbitration and commercial litigation in Turkey.

If assets, revenues or valuable contractual rights belonging to a Turkish energy company in which you invested are being transferred to a controlling shareholder, affiliate or another related party, you may contact our office for a case-specific legal assessment. Experienced legal representation can help identify the transaction, preserve financial evidence, assess urgent protective measures, challenge unlawful corporate actions and pursue compensation from responsible parties.

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 No: 148, 06520 Balgat, Cankaya, Ankara, Turkey