Can a foreign shareholder challenge company assets sold below market value in Turkey? Learn about director liability, related-party transactions, injunctions, valuation evidence, shareholder lawsuits and recovery of company losses.

A foreign shareholder who discovers that a Turkish company has sold valuable assets significantly below market value may have several legal remedies depending on how the transaction was approved, who purchased the assets, whether the company actually received the sale price and whether directors or controlling shareholders acted against the company’s interests. The fact that an asset was sold cheaply does not, by itself, automatically make the sale invalid. Companies can legitimately sell property below an appraisal figure because of liquidity needs, distressed market conditions, urgent financing requirements, defects in the asset or other genuine commercial reasons. The legal risk becomes much greater where valuable real estate, machinery, vehicles, inventory, intellectual property or other business assets are transferred to a shareholder, director, relative or related company for a fraction of their real value without a credible commercial justification. For a foreign shareholder, the central questions are therefore what the asset was genuinely worth, who decided to sell it, whether the decision complied with Turkish company law, who benefited from the transaction, whether the sale price was actually paid and how much damage the company suffered.

Can a Foreign Shareholder Challenge a Below-Market Sale in Turkey?

Potentially, yes.

Foreign shareholders generally exercise shareholder rights in a Turkish company according to the same corporate-law framework applicable to the relevant company structure. The first issue is therefore not the shareholder’s nationality but whether the transaction violated the Turkish Commercial Code, the company’s articles of association, management duties, shareholder rights or another applicable legal rule.

A challenge can take different forms depending on the circumstances. The objective may be to challenge a corporate resolution, establish liability of directors or managers, obtain compensation for company losses, protect remaining assets through interim measures or pursue other remedies connected with the disputed transaction.

Selling Below Market Value Is Not Automatically Unlawful

This distinction is critical.

Suppose a company owns machinery with an accounting value of TRY 20 million. The machinery is obsolete, requires major repairs and cannot easily be sold. After several months on the market, an independent purchaser offers TRY 13 million.

Management accepts the offer.

The fact that the accounting value was TRY 20 million does not automatically prove that directors damaged the company.

The situation is fundamentally different where machinery genuinely worth approximately TRY 20 million is transferred for TRY 3 million to another company controlled by the majority shareholder.

The Greater the Difference, the More Important the Explanation

A modest valuation difference may have an ordinary commercial explanation.

A transaction at 10%, 20% or 30% of credible market value naturally raises much more serious questions, particularly where related parties are involved.

Example: Foreign Minority Shareholder

Consider a company in Turkey with the following ownership:

Foreign Shareholder: 35%

Turkish Majority Shareholder: 65%

The company owns a warehouse worth approximately EUR 5 million.

The majority shareholder controls another company.

The warehouse is transferred to that company for EUR 900,000.

There is no independent valuation.

No competing offers are obtained.

Shortly afterward, the receiving company sells the warehouse to an unrelated third party for EUR 4.8 million.

The foreign shareholder then discovers that even the EUR 900,000 purchase price was never fully paid to the original company.

This situation requires immediate legal and financial investigation.

First Question: What Was the Real Market Value?

The case should not begin with the shareholder simply saying:

“The asset was sold too cheaply.”

The allegation needs objective valuation evidence.

Independent Valuation

Depending on the asset, an independent expert may need to determine its value as of the transaction date.

The historical valuation date is important.

Today’s Value May Not Be the Correct Value

If a property was transferred in March 2024 and litigation begins in 2026, the relevant analysis cannot necessarily rely only on its 2026 value.

The market conditions existing when the transaction occurred should be reconstructed.

Real Estate

For company-owned real estate, evidence may include comparable transactions, location, zoning status, development rights, rental income and physical characteristics.

Machinery

Industrial equipment may require technical valuation based on age, capacity, condition, manufacturer and remaining economic life.

Vehicles

Market data existing at the transaction date may assist valuation.

Inventory

Quantity, quality, purchase price, marketability and deterioration may affect value.

Trademarks and Intellectual Property

Intangible assets can be more difficult to value.

A trademark generating significant revenue may be worth substantially more than its accounting book value.

Software

A software platform transferred for a nominal price to a shareholder-controlled company may represent substantial corporate value.

Customer Contracts

In some cases, the most valuable assets are contracts rather than physical property.

Second Question: Who Bought the Asset?

Buyer identity is extremely important.

A sale to an independent third party following a genuine competitive process is substantially different from a sale to the majority shareholder’s own company.

Related-Party Transaction

The investigation should determine whether the buyer is connected with a director, manager or shareholder.

Do Not Look Only at the Company Name

Examine:

Shareholders → Directors → Managers → Authorized Signatories → Beneficial Relationships → Family Relationships → Related Companies.

Company Registered to a Relative

A suspicious purchaser may formally belong to the majority shareholder’s spouse, sibling, child or business associate.

The factual relationship should therefore be investigated.

Newly Incorporated Purchaser

The date the purchasing company was established can be highly significant.

Imagine this chronology:

1 March: New company incorporated.

15 March: Original company’s warehouse transferred to new company.

1 April: Employees transferred.

15 April: Customers begin dealing with new company.

June: Original company becomes loss-making.

That chronology may suggest a broader transfer of business value rather than an isolated asset sale.

Third Question: Who Authorized the Sale?

The company’s corporate structure must be examined.

Was the transaction authorized by management?

Was a board resolution adopted?

Was general assembly approval required or obtained?

Did the articles of association contain special restrictions?

Was the person signing the sale agreement authorized to represent the company?

Obtain the Corporate Decision

The actual resolution should be reviewed rather than relying on the majority shareholder’s explanation.

Check the Date

A corporate decision created after the transaction may raise additional questions.

Check Signatures

Where authenticity is disputed, signature evidence may become important.

Check the Trade Registry

Determine who had representation authority at the relevant date.

Articles of Association

Foreign shareholders should also review whether the articles contain reserved matters, enhanced voting requirements or other provisions affecting major asset transactions.

Shareholders’ Agreement

The shareholders’ agreement may impose additional contractual restrictions.

For example, it may require unanimous consent for disposal of assets exceeding EUR 500,000.

A transaction made contrary to such an agreement may create additional contractual consequences, although the corporate-law effect requires separate analysis.

Fourth Question: Was the Purchase Price Actually Paid?

A sale agreement stating TRY 20 million does not establish that TRY 20 million entered the company.

Follow the money.

Check the Company Bank Account

Identify:

Buyer → Payment Date → Amount → Receiving Account → Transfer Description.

Partial Payment

A transaction may state a large sale price while only a small amount was actually transferred.

No Payment

An unpaid related-party sale can be particularly significant.

Accounting Entry Is Not Enough

The accounting records may show a receivable from the purchaser.

That does not mean the company actually received cash.

Circular Payment

More sophisticated transactions may create the appearance of payment.

For example:

Related Company pays TRY 10 million → Original Company receives TRY 10 million → Original Company transfers TRY 9 million to majority shareholder → Majority shareholder transfers funds back to Related Company.

The entire money flow should therefore be reconstructed.

Fifth Question: Why Was the Asset Sold?

Management may argue that the company urgently needed liquidity.

That explanation should be tested against contemporaneous evidence.

Was the Company Actually in Financial Difficulty?

Review financial statements and bank balances existing before the sale.

Was There an Immediate Debt?

Determine whether creditors were demanding payment.

Were Other Financing Options Considered?

This can help evaluate the commercial rationale.

Were Other Offers Obtained?

A competitive sales process may support the argument that the price reflected genuine market conditions.

No Marketing Process

A valuable asset privately transferred to a related party without advertising, tendering or obtaining competing offers can require closer scrutiny.

Directors and Managers Cannot Treat Company Property as Their Own

This principle is particularly important for foreign minority shareholders.

Even a controlling shareholder does not personally own company assets.

If a person owns 70% of a Turkish company, that does not mean that person personally owns 70% of every company building, vehicle, machine or bank balance.

The assets belong to the company.

Director and Manager Liability

Under the Turkish Commercial Code, directors and managers may face liability where they culpably breach duties arising from legislation or the company’s articles and thereby cause compensable damage.

A below-market related-party sale can therefore potentially lead to management-liability issues where the necessary legal elements are established.

Bad Commercial Decision Is Not Automatically Director Liability

Courts should not simply replace management’s commercial judgment with hindsight.

A business decision that later proves unsuccessful is different from deliberately transferring corporate value to an insider.

Evidence of Conflict of Interest Matters

Suppose the same person effectively controls both seller and purchaser.

The transaction requires especially careful examination.

Who Negotiated for the Seller?

If the majority shareholder effectively represented both sides of the transaction, conflict issues may arise.

Who Determined the Price?

Was there an independent valuation?

Or did the interested director simply choose the figure?

Was the Transaction Disclosed?

Disclosure to the relevant corporate bodies can become important.

Was the Foreign Shareholder Kept in the Dark?

Evidence that the transaction was deliberately concealed may materially affect the broader factual assessment.

Shareholder Information and Inspection Rights

A foreign shareholder who suspects a below-market asset transfer should use the information and inspection rights available for the relevant company type.

The precise procedure differs between an anonymous company and a limited company.

Documents to Request

The shareholder should focus on obtaining the sale agreement, invoices, payment records, board decisions, general assembly minutes, valuation reports, accounting entries and correspondence concerning the transaction.

Do Not Ask Only for “All Company Documents”

Targeted requests are generally more useful.

Ask Specific Questions

For example:

What valuation was obtained?

Who approved the purchaser?

What other offers were received?

When was the purchase price paid?

Which bank account received it?

What relationship exists between purchaser and directors?

Refusal to Provide Information

If management repeatedly refuses legitimate requests for information, the shareholder should evaluate the corporate remedies available for obtaining or examining the necessary information.

Special Audit

For anonymous companies, the Turkish Commercial Code provides a special-audit mechanism under statutory conditions.

Where suspicious related-party transactions cannot be properly investigated through ordinary information rights, this mechanism can become strategically important.

General Assembly Resolution Can Potentially Be Challenged

Where the disputed transaction is based on a general assembly resolution, the validity of that resolution should be reviewed.

Depending on the circumstances, annulment or nullity issues may arise.

Deadlines Matter

Challenges to corporate resolutions can be subject to strict procedural periods.

A shareholder should therefore not wait for the company dispute to develop for several years before reviewing the resolution.

Was the Shareholder Properly Invited?

Notice procedures should be checked.

Was the Shareholder Allowed to Vote?

Improperly preventing participation can create additional issues.

Was Relevant Information Concealed?

The circumstances surrounding the resolution may become important.

Conflict in Voting

Where an interested shareholder participated in a transaction benefiting themselves or a related entity, the applicable voting and conflict rules should be examined.

Can the Sale Itself Be Cancelled?

This question requires particular care.

Establishing that a director acted improperly does not automatically mean that every transaction with a third party becomes void.

The legal position depends on matters including the nature of the defect, authority, applicable corporate rules, purchaser’s position and the specific legal basis relied upon.

Independent Third-Party Purchaser

A genuine independent purchaser acting in good faith can present a very different legal situation from a company controlled by the director who arranged the sale.

Related Purchaser

Where the purchaser participated in or knew of an abusive transaction, additional remedies may require consideration depending on the circumstances.

Subsequent Sale to an Independent Third Party

Speed becomes particularly important here.

Suppose Company A transfers land to related Company B for TRY 10 million.

Company B then sells the land to independent Company C for TRY 60 million.

Once the property moves further through the transaction chain, recovery of the specific asset may become significantly more complicated.

Interim Measures Can Therefore Be Critical

Where there is a genuine and immediate risk that disputed assets will be transferred again, the availability of a precautionary injunction (ihtiyati tedbir) should be evaluated.

An Injunction Is Not Automatic

The shareholder must establish the applicable statutory conditions.

The requested measure should also be connected with the right being litigated and proportionate to the circumstances.

Avoid Generic Requests to “Freeze Everything”

The application should identify the specific asset, transaction, threatened transfer and legal right requiring protection.

Remaining Company Assets May Need Protection Too

If one property has already been transferred suspiciously, management may be preparing additional transactions.

The shareholder should therefore investigate what remains.

Create a Remaining Asset List

Real Estate → Machinery → Vehicles → Inventory → Cash → Receivables → Shares in Subsidiaries → Trademarks → Licenses → Major Contracts.

Director Liability Claim

Where the company has suffered damage because management transferred assets below fair value in breach of its duties, a liability claim may become relevant.

Who Actually Suffered the Damage?

This question is crucial.

Suppose the company sells property worth EUR 5 million for EUR 1 million.

The immediate EUR 4 million economic loss may primarily be suffered by the company.

Foreign Shareholder’s Shares Also Lose Value

That economic consequence does not automatically mean the shareholder personally has an independent EUR 4 million direct-damage claim.

The distinction between company damage and direct shareholder damage must therefore be carefully analyzed.

Restoration of Company Value Can Protect the Shareholder

In many disputes, obtaining compensation for the company can indirectly restore the economic value underlying the foreign shareholder’s investment.

Do Not Sue the Wrong Person for the Wrong Damage

Asset-stripping cases can fail strategically where the claimant does not distinguish among:

Company’s claim

Shareholder’s direct claim

Director’s liability

Purchaser’s liability

Corporate-resolution challenge

Contractual claim

Each requires its own legal foundation.

Controlling Shareholder Abuse

Where the majority shareholder uses control to transfer company value for personal benefit, the conduct may raise broader corporate-governance issues.

Group Companies

Special consideration is necessary where the seller and purchaser form part of a corporate group.

The Turkish Commercial Code contains provisions concerning controlling and dependent companies.

TTK Article 202

Where legally applicable control exists and a dependent company is caused to suffer loss through the exercise of that control, the company-group provisions may become important.

Whether these rules apply depends on the actual control structure and transactions involved.

A “Group Company” Label Does Not Automatically Justify the Transaction

Moving assets among related companies must still be analyzed under the applicable corporate-law framework.

Sale Followed by Leaseback

A suspicious structure can involve selling the company’s building cheaply to a related company and then leasing the same building back at a high rent.

The economic effect may be substantial.

Example

Company A owns its factory.

Factory is sold to Company B for TRY 30 million despite an alleged market value of TRY 100 million.

Company A then pays Company B TRY 8 million annual rent.

The foreign shareholder should analyze both the original sale and subsequent rental arrangement.

Trademark Transfer Followed by License Fee

A similar structure can involve intellectual property.

Company A transfers its trademark cheaply to related Company B.

Company A then pays Company B royalties to continue using the trademark.

The overall transaction may reduce Company A’s profitability significantly.

Customer Contracts Sold Below Value

A profitable contract portfolio can be transferred to a related entity.

The economic value of the contracts should be examined.

Receivables Sold at a Discount

Companies sometimes legitimately sell receivables below face value.

However, selling easily collectible TRY 100 million receivables to a related company for TRY 20 million requires a convincing commercial explanation.

Inventory Sold Cheaply

A company approaching insolvency may dispose of inventory.

Again, distinguish a genuine distressed sale from insider asset diversion.

Criminal Law Should Be Considered Separately

A below-market sale is not automatically a criminal offense.

The existence of corporate loss or director liability does not itself establish criminal responsibility.

However, separate criminal-law questions may arise where the transaction involves fraudulent documents, forged signatures, deceptive schemes, intentional appropriation or other conduct satisfying the elements of a criminal offense.

Fake Valuation Reports

If an allegedly independent valuation was fabricated, investigate its authenticity.

Forged Board Resolution

A fake corporate decision creates a substantially different legal problem.

Forged Foreign Shareholder Signature

If documents falsely state that the foreign shareholder approved the transaction, signature examination and potential criminal proceedings may become relevant.

Fake Power of Attorney

Transactions executed through an allegedly fraudulent power of attorney should be investigated immediately.

False Invoice

An invoice can be used to create an appearance of a legitimate sale.

Its existence does not establish that the transaction was commercially genuine.

Criminal Complaint Should Not Be Used Merely as Commercial Pressure

A shareholder dispute should not automatically be characterized as fraud or another criminal offense.

Criminal allegations should be based on concrete evidence satisfying the elements of the relevant offense.

Foreign Shareholder Outside Turkey

A foreign shareholder does not necessarily need to relocate to Turkey to challenge suspicious corporate transactions.

Many proceedings can be handled through appropriate legal representation, subject to procedural requirements.

Foreign Corporate Shareholder

Where the shareholder is an overseas corporation, documents establishing corporate existence and representation authority may be necessary.

Power of Attorney

A power of attorney executed abroad may require appropriate authentication and translation depending on where and how it is issued.

Evidence Stored Abroad

Preserve shareholder agreements, investment agreements, emails and international bank records in original form.

SWIFT Records

If the foreign shareholder originally funded the Turkish company, international transfer records can help establish the investment history.

Compare the Company Before and After the Sale

This can be extremely persuasive.

Prepare:

Revenue Before Sale → Revenue After Sale

Assets Before Sale → Assets After Sale

Debt Before Sale → Debt After Sale

Cash Before Sale → Cash After Sale

Profit Before Sale → Profit After Sale

Was the Company Left With Debt but No Assets?

This is a major warning sign.

Asset Stripping Can Occur Through Multiple Small Transactions

Do not investigate only the largest sale.

A partner may gradually remove value through dozens of transactions that individually appear less significant.

Forensic Accounting Can Be Necessary

Review at least:

Asset disposals → Related-party payments → Loans → Management fees → Consultancy fees → Royalties → Rent → Receivable assignments → Inventory movements.

Prepare a Transaction Matrix

Asset → Transfer Date → Market Value → Sale Price → Purchaser → Relationship → Approval → Payment → Current Owner.

Prepare a Valuation Matrix

Asset → Book Value → Independent Value → Sale Price → Difference → Valuation Date → Evidence.

Prepare a Payment Matrix

Contract Price → Invoice → Due Date → Amount Paid → Bank Account → Remaining Debt → Subsequent Money Movement.

Prepare a Corporate Decision Matrix

Transaction → Decision-Making Body → Resolution Date → Participants → Votes → Conflict → Authority → Supporting Documents.

Prepare a Recovery Matrix

Asset → Current Owner → Further Transfer Risk → Potential Claim → Interim Protection → Company Loss → Responsible Persons.

First 24 Hours After Discovering the Below-Market Sale

Preserve the sale documents, corporate resolutions, available accounting records, emails and communications. Determine whether the asset has already been transferred to the purchaser and whether another sale is imminent.

First 48 Hours

Identify the purchaser’s shareholders and directors, investigate related-party connections, establish preliminary market value and determine whether the sale consideration actually entered the company’s bank account.

First 72 Hours

Review shareholder information rights, possible challenges to corporate decisions, director or manager liability and the availability of proportionate interim protection. If evidence indicates forged documents or other genuine criminal conduct, evaluate that dimension separately.

What If the Asset Has Already Been Resold?

Do not assume the case is over.

The legal strategy may shift from recovering the specific asset toward claims concerning corporate loss and liability against responsible persons, depending on the circumstances.

What If the Buyer Still Owes the Sale Price?

The company may possess a receivable against the purchaser.

That receivable should be identified and protected.

What If the Buyer Is Insolvent?

This can strengthen the practical concern surrounding the original decision to transfer valuable company property to that purchaser.

What If the Majority Shareholder Says the Foreign Investor Has No Right to Interfere?

Minority ownership does not mean having no legal rights.

A foreign shareholder’s rights depend on the company type, shareholding, articles of association, Turkish Commercial Code and circumstances of the transaction.

2026 Legal Strategy for Challenging Turkish Company Assets Sold Below Market Value

The most effective strategy is to establish the transaction economically before deciding which lawsuit to file. The foreign shareholder should first determine the asset’s historical fair market value, not merely rely on current value or accounting records. The purchaser’s ownership and management structure should then be investigated to identify any relationship with directors or controlling shareholders. Corporate records should establish who authorized the sale and whether the decision complied with the company’s articles and applicable Turkish company law. The full purchase price must then be traced through bank records because a written contract or invoice does not prove genuine payment. If the company suffered a measurable loss, the duties and potential liability of the persons who approved or implemented the transaction should be assessed. Where the transaction derives from a corporate resolution, available challenges and applicable deadlines should be reviewed immediately. Where assets remain at risk of further transfer, proportionate interim protection should be evaluated without waiting for final judgment. The practical roadmap is therefore: identify the asset → obtain the transfer agreement → establish historical market value → identify the purchaser → map related-party relationships → obtain corporate resolutions → examine representation authority → determine whether the foreign shareholder was informed → trace the sale price → verify actual payment → investigate circular transactions → compare market value with consideration → calculate company loss → identify responsible directors and managers → distinguish company damage from direct shareholder damage → examine general assembly or board decisions → evaluate shareholder information and inspection rights → consider special audit where applicable → assess group-company rules where relevant → seek interim protection where legally justified → investigate the purchaser’s role → assess genuine criminal conduct separately → pursue appropriate corporate and compensation remedies → enforce the resulting decision against recoverable assets.

Frequently Asked Questions

1. Can a Turkish company legally sell an asset below market value?

Yes, a sale below an estimated market value is not automatically unlawful. The commercial reason, transaction process, purchaser relationship, actual consideration and management duties must all be examined.

2. Can a foreign minority shareholder challenge the sale?

Potentially, yes. Foreign nationality does not prevent a shareholder from exercising applicable corporate rights and pursuing remedies concerning transactions that allegedly damage the company.

3. What if the asset was sold to the majority shareholder’s other company?

This creates an important related-party issue. The transaction should be examined closely for commercial justification, valuation, authorization, conflicts and actual payment.

4. Can I stop the buyer from reselling the asset?

Potentially, an interim measure may be available where the applicable legal conditions are satisfied. Speed is important because subsequent transfers can complicate recovery.

5. Can the director be personally liable for selling company property too cheaply?

Potentially, where the director or manager culpably breached applicable duties and caused compensable damage. A poor commercial outcome alone does not automatically establish liability.

6. How do I prove the asset was sold below market value?

Independent historical valuation, comparable transactions, technical expert evidence, subsequent resale prices and other market evidence may be relevant depending on the asset.

7. What if the contract shows a fair price but the buyer never paid it?

The actual bank movements and accounting records should be examined. A contractual sale price does not establish that the company received the money.

8. Can the shareholder claim the entire difference between market value and sale price personally?

Not automatically. Where the asset belonged to the company, the immediate loss may primarily belong to the company. Direct shareholder damage and company damage must be distinguished.

9. Is a below-market related-party sale a criminal offense?

Not necessarily. Corporate misconduct and criminal liability are separate issues. Criminal proceedings require conduct satisfying the elements of an applicable criminal offense.

10. What should a foreign shareholder do immediately after discovering the transaction?

Preserve the documents, determine the asset’s current ownership, investigate whether another transfer is imminent, identify the buyer’s relationship with management, obtain preliminary valuation evidence and examine whether urgent interim protection is necessary.

Legal Support for Foreign Shareholders Challenging Below-Market Asset Sales in Turkey

Foreign shareholders who discover suspicious company asset sales may need immediate assistance concerning related-party transactions, undervalued asset transfers, shareholder information rights, corporate resolutions, director and manager liability, independent valuation, interim injunctions, special audits and recovery of company losses.

Fırat Fesih Kaya Law Office provides legal assistance to foreign shareholders, investors, international companies and executives involved in shareholder and corporate asset disputes in Turkey.

Fırat Fesih Kaya can assist with investigating below-market asset sales, obtaining and analyzing corporate records, identifying related-party transactions, challenging corporate decisions, seeking interim protection, pursuing director and manager liability and developing litigation strategies aimed at restoring company value.

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