Turkish Company Director Moves Money to a Related Company Before a Shareholder Dispute: Legal Remedies for Foreign Investors – 2026 Updated Guide

What can a foreign investor do when a Turkish company director transfers money to a related company before a shareholder dispute? Learn about audits, injunctions, asset tracing and lawsuits.

A Turkish company director who transfers company money to a related company before a shareholder dispute may expose the company, the director and the recipient company to serious legal claims. However, not every related-party transfer is automatically unlawful. The key issues are authorization, commercial purpose, fair value, repayment, disclosure and the financial harm caused to the company.

A foreign investor should act quickly because money may be transferred again, records may be deleted and the related company may become insolvent. The first priorities are evidence preservation, financial investigation, urgent asset protection and selection of the correct claimant.

Is a Transfer to a Related Company Automatically Illegal?

No. A Turkish company may lawfully transact with a related company if the transaction has a genuine commercial purpose, is properly authorized, fairly priced and accurately recorded.

The transaction becomes legally problematic when the director:

• Transfers money without corporate authority.
• Conceals the transaction from shareholders.
• Provides an interest-free or unsecured loan without justification.
• Pays an inflated invoice.
• Transfers funds for personal benefit.
• Uses company money to finance another business.
• Creates false consulting or service payments.
• Transfers money shortly before a shareholder dispute.
• Refuses to provide accounting records.
• Fails to seek repayment.

The purpose, timing, value and documentation of the transaction must be investigated before bringing a claim.

Who Owns the Transferred Money?

Company money generally belongs to the company, not directly to the foreign shareholder. This distinction affects standing and the type of remedy available.

If the company suffered the financial loss, the company may be the primary claimant. A shareholder may need to request that the company bring a claim, challenge management conduct or use a derivative remedy where legally available.

A foreign investor may also have a direct claim if the transfer violated a shareholder agreement, investment warranty, disclosure obligation or a separate personal right.

Filing a claim in the wrong capacity may delay the proceedings or result in dismissal.

What Should the Foreign Investor Do Immediately?

The investor should avoid confronting the director without first preserving evidence if there is a risk of further concealment. The initial response should include:

1. Preserving bank records, accounting files and communications.
2. Identifying the related company and its owners.
3. Reviewing the director’s authority and corporate approvals.
4. Requesting financial and transaction records in writing.
5. Commissioning an independent financial review.
6. Assessing the risk of further transfers.
7. Seeking urgent court protection where necessary.
8. Preparing company, shareholder and director-liability claims.
9. Considering criminal remedies only after reviewing the evidence.
10. Monitoring liquidation or insolvency risks.

The foreign investor should document the date on which the transfer was discovered and preserve all communications concerning it.

What Evidence Proves an Improper Transfer?

Important evidence may include:

• Bank statements.
• Payment instructions.
• Transfer descriptions.
• Loan or service agreements.
• Invoices issued by the related company.
• Board and shareholder resolutions.
• Accounting records.
• Email and messaging records.
• Ownership and management information.
• Valuation reports.
• Evidence of repayment or non-repayment.
• Proof that the company continued using the transferred money.
• Financial statements before and after the transfer.

The absence of a written agreement does not necessarily prove wrongdoing, but it may be significant when combined with a lack of repayment, unusual timing or an insider relationship.

Can a Forensic Audit Trace the Money?

Yes. A forensic audit can follow the money from the Turkish company’s bank account to the related company and then examine where the funds were ultimately used.

The investigation may review:

• The original transfer.
• Any intermediate accounts.
• Payments to directors or shareholders.
• Purchases of real estate or vehicles.
• Loans to other companies.
• Cash withdrawals.
• Artificial service or consulting charges.
• Transfers to foreign accounts.
• Repayment records.
• Changes in accounting entries.

A forensic accountant should prepare a clear transaction timeline and identify the financial damage. In 2026, cloud accounting, electronic invoices, online banking records and digital approval systems may be particularly important.

Can the Foreign Investor Request Company Records?

Depending on the company structure and shareholding rights, the investor may request financial statements, bank-related records, accounting documents, related-party transaction information and corporate resolutions.

The request should be made in writing and should identify the documents and time period. The investor should retain evidence of delivery and the company’s response.

If the company refuses to provide records, the investor may consider a special audit, court-supported inspection, evidence-preservation measure or shareholder claim.

Can a Turkish Court Freeze the Funds?

A court may consider an interim injunction or precautionary attachment where the investor or company establishes a credible claim, urgency and a real risk that the money or assets will be transferred again.

The requested measure should be specific. It may concern identifiable bank accounts, receivables, real estate, shares, vehicles or other assets connected to the transaction.

The court may require security. The investor should also establish the correct claimant and legal basis because a shareholder cannot automatically freeze company or related-company assets merely because the share value has declined.

Can the Related Company Be Ordered to Return the Money?

Potentially, yes. The related company may be required to return funds or compensate the company if it received the money without valid legal grounds, through a sham transaction, at an unfair value or with knowledge of the director’s misconduct.

The analysis may consider:

• Whether the related company knew the transfer was improper.
• Whether it provided goods or services.
• Whether the price was commercially reasonable.
• Whether the money was repaid.
• Whether the transfer was properly recorded.
• Whether the director controlled both companies.
• Whether the related company transferred the money again.

A separate recovery claim may be required against the recipient company.

Can the Director Be Held Personally Liable?

A director may face personal liability if the transfer resulted from a breach of management duties, misuse of company property, unauthorized conduct or deliberate concealment.

The claimant should establish:

• The director’s legal duty.
• The specific transfer.
• The absence of valid authority or commercial justification.
• The financial loss.
• The connection between the conduct and the damage.

The director may also face claims concerning multiple related transactions, not only the first bank transfer.

Can Corporate Decisions Be Challenged?

If the transfer was approved by a board or shareholder resolution, the foreign investor should examine whether the decision was adopted properly.

Potential problems may include:

• Lack of notice.
• False or incomplete financial information.
• Conflict of interest.
• Unauthorized voting.
• Forged signatures.
• Failure to disclose the related-party relationship.
• Lack of required approval.
• Violation of the company’s articles or shareholder agreement.

An invalid or improperly adopted resolution may support a challenge, compensation claim or application for interim protection.

Can the Conduct Lead to Criminal Liability?

Depending on the facts, transferring company money to a related company may raise potential criminal issues involving fraud, misappropriation, breach of trust, forgery or concealment of assets.

A commercial disagreement or poorly documented loan is not automatically a crime. A criminal complaint should be supported by specific documents showing intentional conduct, personal benefit, false records or a deliberate attempt to harm the company or investors.

Civil, corporate, tax and criminal procedures should be coordinated to avoid inconsistent statements and preserve the strongest evidence.

What If the Money Was Sent Abroad?

A transfer to a foreign account may require urgent cross-border asset tracing and evidence collection. The investor should identify the destination account, beneficiary, intermediary bank, transfer purpose and subsequent use of the funds.

The recovery process may involve Turkish proceedings, foreign legal assistance, banking records, asset freezing applications and recognition or enforcement steps in the country where the funds or assets are located.

The sooner the transfer is identified, the greater the chance of preserving the money or tracing assets purchased with it.

What If the Company Is Approaching Insolvency?

If the Turkish company cannot pay its debts, the investor should immediately examine liquidation, restructuring and creditor-priority risks.

A related-party transfer made shortly before insolvency may receive additional scrutiny. The company or creditors may seek to challenge transactions that reduced the asset pool or favored insiders.

A foreign investor should determine whether it is acting as a shareholder, creditor, lender, guarantor or buyer because each legal status may provide different remedies.

Practical 2026 Legal Strategy

A foreign investor should combine financial and legal work rather than relying on a single lawsuit. The recommended approach may include:

• Independent forensic accounting.
• Evidence preservation.
• Formal shareholder information requests.
• Interim injunctions or precautionary attachment.
• Recovery claims against the recipient company.
• Director and manager liability claims.
• Challenges to corporate resolutions.
• Asset tracing and cross-border enforcement.
• Criminal and tax analysis where justified.
• Insolvency monitoring.

Lawyer Fırat Fesih Kaya assists foreign investors with related-party transactions, director liability, forensic investigations, asset recovery and shareholder disputes in Turkey.

Frequently Asked Questions (FAQ)

1. Is transferring money to a related company automatically unlawful?

No. The legality depends on authorization, commercial purpose, fair value, disclosure, repayment and the financial harm caused to the company.

2. Can a foreign shareholder personally recover the transferred money?

The company may be the primary claimant because company funds belong to the company. A shareholder may need to use a corporate, derivative or direct contractual remedy.

3. Can the recipient company be sued?

Potentially, especially where it received money without a valid basis, through a sham transaction or with knowledge of the director’s misconduct.

4. Can the transferred funds be frozen?

An injunction or precautionary attachment may be available if the applicant proves a credible claim, urgency and a risk of further transfer.

5. What records should the foreign investor request?

Bank records, payment instructions, invoices, loan agreements, accounting files, corporate approvals, related-party information and communications should be prioritized.

6. Can a forensic audit be used in court?

Yes. A properly prepared forensic report may help trace funds, identify suspicious transactions and calculate the company’s loss.

7. Can the director be personally liable?

A director may be liable where a breach of duty, unauthorized transfer or misuse of company property causes proven damage.

8. Can a shareholder challenge a board or shareholder resolution?

Potentially, if the resolution was adopted without proper notice, authority, disclosure or compliance with corporate rules.

9. Can transferring money abroad affect recovery?

Yes. Cross-border transfers may require urgent asset tracing, foreign evidence collection and enforcement measures in more than one country.

10. How quickly should a foreign investor act?

Immediately. Delays may allow the funds to be transferred again, records to be deleted or the recipient company to become insolvent.

This article is provided for general informational purposes only and does not constitute legal advice. We recommend consulting a lawyer about your specific circumstances to avoid any loss of rights.

Legal Support for Related-Party Money Transfers in Turkey

Foreign investors who discover suspicious transfers by a Turkish company director should obtain legal assistance before further funds or assets disappear. Fırat Fesih Kaya Law Office provides professional support throughout Turkey and internationally for forensic audits, injunctions, asset tracing, director liability and shareholder litigation.

Call Now: +90 312 434 22 22
WhatsApp: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No:221, Yildirim Tower, Office No:148, Balgat, Cankaya, Ankara, Turkey