Foreign Shareholder Suspects a Secret Related Company in Turkey: How Can Hidden Transactions Be Investigated?

Hidden Related Company in Turkey: Foreign Shareholder Remedies

How can a foreign shareholder investigate a secret related company in Turkey? Learn about corporate records, hidden transactions, evidence, injunctions, and director liability.

A foreign shareholder may become concerned when a Turkish company suddenly loses profitable contracts, customers, assets, or cash despite having no clear commercial explanation. One possible reason is the existence of an undisclosed related company controlled by a director, manager, shareholder, family member, or business partner.

Hidden related-party transactions can reduce company value and transfer profits away from the legitimate shareholders. They may also involve conflicts of interest, breach of management duties, unfair competition, unauthorized use of company assets, or fraud.

The most important step is to investigate systematically, preserve evidence, and prevent further transactions before the company suffers additional losses.

What Is a Secret Related Company?

A secret related company is an entity that has a financial, managerial, family, or beneficial connection with a company director or shareholder but has not been properly disclosed to the company or its shareholders.

The connection may be hidden through nominee shareholders, family members, employees, offshore structures, former managers, or companies registered under a different name. In some cases, the related company may appear independent but receive the company’s contracts, customers, payments, or assets.

Suspicious signs may include repeated payments to an unfamiliar entity, contracts signed with a newly established company, customers being redirected, unexplained consulting fees, asset sales below market value, or a sudden reduction in the company’s profits.

The existence of a common shareholder or business relationship does not automatically prove wrongdoing. The central issue is whether the transaction was disclosed, authorized, commercially reasonable, and completed in the company’s interests.

When Can Hidden Transactions Become Unlawful?

A related-party transaction may create legal liability when the responsible person conceals the relationship, uses company information for personal benefit, acts without authority, or causes the company to suffer an unjustified loss.

Examples include transferring a profitable contract to an affiliated entity at a price far below market value, paying excessive fees to a related company, selling company property without proper approval, redirecting customers, assigning receivables, or using company employees and equipment for another business.

The transaction may also be problematic if the director voted on or approved a matter in which they had a personal interest without making the conflict known.

Under the Turkish Commercial Code framework, directors and managers may be responsible for damage caused by failure to act carefully, loyally, and within their legal authority.

How Can a Foreign Shareholder Start the Investigation?

The investigation should begin with a review of the company’s ownership, management, representation authority, financial records, and commercial relationships.

A foreign shareholder may request access to corporate information through the company’s internal procedures and applicable shareholder rights. The articles of association, shareholders’ agreement, board decisions, general assembly resolutions, management contracts, and approval policies should be examined first.

The company’s commercial records should then be compared with external information. Corporate registry records, public company filings, contract counterparties, invoice details, banking records, and changes in management or ownership may reveal connections that were not previously disclosed.

The investigation should focus on relationships rather than isolated documents. A single payment may have an innocent explanation, but a pattern of payments, contracts, employees, and customers moving to the same entity may establish a much stronger case.

What Records Should Be Examined?

Important records may include financial statements, general ledgers, bank statements, invoices, payment instructions, purchase orders, customer contracts, supplier agreements, board minutes, shareholder resolutions, and accounting correspondence.

Electronic records may be equally important. Corporate e-mail accounts, cloud storage, CRM systems, online banking logs, electronic invoices, digital signatures, document access histories, and messaging applications may show who created or approved a transaction.

The shareholder should also examine company expenses, management fees, loans, guarantees, lease payments, commissions, consulting agreements, and transfers involving directors or entities connected with them.

A forensic accountant may be required to trace money flows and compare transaction prices with market values. A corporate lawyer can then determine whether the evidence supports a compensation claim, director-liability action, injunction request, or criminal complaint.

Can Shareholders Request a Special Audit or Expert Review?

Depending on the company type, ownership structure, articles of association, and applicable procedural requirements, shareholders may be able to request additional information, an independent financial review, or a special audit.

An expert review can investigate whether company assets were transferred below value, whether the related company performed genuine services, whether payments were commercially justified, and whether the company suffered a measurable loss.

A foreign shareholder should avoid relying only on verbal explanations from the director. Every explanation should be supported by contracts, invoices, approval records, market comparisons, and evidence showing that the company received a genuine commercial benefit.

If records are withheld, incomplete, or altered, that conduct may become relevant to later corporate or judicial proceedings.

Can an Injunction Prevent Further Transactions?

An interim court measure may be requested when there is a serious risk of continuing financial harm, destruction of evidence, unauthorized asset transfers, or further misuse of company information.

Depending on the circumstances, the requested protection may concern the transfer of specific assets, continued payments to a related company, use of confidential customer records, disposal of company property, or unauthorized access to corporate accounts.

The application should identify the transaction, the responsible persons, the threatened harm, and the evidence supporting the claim. Courts generally assess urgency and proportionality. A broad request to stop all dealings with every affiliated company may not be appropriate without specific evidence.

The court may also require security. For this reason, an injunction application should be prepared carefully and supported by financial records, contracts, electronic evidence, and a clear explanation of the imminent risk.

Can Directors Be Held Personally Liable?

A director may face personal liability if they use their corporate position to benefit a related company and cause damage to the company they manage.

Potential examples include diverting a corporate opportunity, concealing a conflict of interest, approving a below-market transaction, transferring company customers, using company funds for an affiliated entity, or signing documents without proper authority.

Personal liability depends on the director’s role, authority, intent, negligence, financial benefit, and the damage suffered by the company. The mere existence of a related-party transaction is not enough by itself.

Where a director controls both companies, the evidence should show whether the director acted for the benefit of the company or improperly prioritized the related entity.

What Compensation Can the Company Claim?

The company may seek compensation for proven financial losses caused by the hidden transactions. Possible losses may include the difference between market value and the transfer price, lost profits, diverted contract revenue, unauthorized expenses, lost customers, and costs incurred to repair the damage.

A financial expert may compare the company’s position before and after the transaction. The analysis should consider expected profit, performance costs, contract duration, renewal opportunities, market conditions, and whether the company could have completed the relevant business.

Foreign shareholders must distinguish between company loss and personal loss. If the company’s assets or profits were reduced, the primary claim usually belongs to the company. A shareholder may need a separate legal basis for a direct claim or may use corporate remedies to protect the company.

Can a Criminal Complaint Be Filed?

A criminal complaint may be considered where the investigation indicates fraud, breach of trust, unauthorized use of company property, falsified documents, unlawful data use, concealment of funds, or deliberate payment diversion.

A criminal investigation may help identify responsible persons and preserve evidence, but it does not automatically compensate the company. Commercial proceedings, compensation claims, interim protection, and corporate measures may also be necessary.

The complaint should be based on specific transactions, documents, dates, amounts, and acts. Unsupported accusations may delay the process and weaken the credibility of the claim.

What Should Foreign Shareholders Do Immediately?

Foreign shareholders should preserve all available company records, request explanations in writing, identify unusual transactions, secure corporate access, and avoid confronting the suspected persons before a legal strategy is prepared.

They should also review whether the company’s banking authority, electronic signature, accounting access, and customer databases remain under proper control.

A formal notice may be appropriate to demand the preservation of records, stop unauthorized transactions, and request disclosure of related-party relationships. The timing and wording of such a notice should be carefully evaluated because it may affect later litigation.

Lawyer Fırat Fesih Kaya can assist foreign shareholders with corporate investigations, evidence preservation, director-liability analysis, interim measures, and compensation proceedings.

2026 Legal Considerations

In 2026, hidden transaction investigations increasingly depend on digital financial and corporate evidence. E-mail chains, electronic invoices, cloud accounting systems, online banking records, CRM activity, digital signatures, and access logs may reveal the true structure of a transaction.

Companies should maintain conflict-of-interest procedures, approval controls, payment authorizations, and clear records of dealings with affiliated entities. Foreign shareholders should request regular reporting and investigate unexplained changes in profitability, customer ownership, or company expenses.

Customer, employee, and financial records may contain personal or confidential information. Evidence must be obtained, preserved, and used lawfully.

Frequently Asked Questions (FAQ)

1. How can a foreign shareholder discover a hidden related company in Turkey?

The shareholder can review corporate records, ownership information, financial statements, contracts, payment records, management connections, and electronic communications.

2. Is it illegal to own a related company without informing shareholders?

The legal result depends on the person’s role, the company documents, the transaction, and whether the undisclosed relationship caused damage or created a conflict of interest.

3. Can a director secretly transfer company contracts to an affiliated business?

A director may face liability if the transfer was unauthorized, below market value, concealed, or carried out for personal or related-party benefit.

4. Can a foreign shareholder request company bank records?

Access depends on the shareholder’s rights, the company structure, and applicable procedures. A lawyer can determine the proper method for obtaining or requesting the records.

5. Can the company obtain an urgent injunction?

An interim measure may be available where there is a risk of further asset transfers, payment diversion, evidence destruction, or continued misuse of confidential information.

6. What evidence proves a hidden related-party transaction?

Bank records, invoices, contracts, board minutes, ownership information, e-mails, customer communications, access logs, and market-value comparisons may be important.

7. Can the company recover money paid to a related company?

Recovery may be possible if the payment lacked a genuine commercial basis, was unauthorized, or caused a proven loss.

8. Can a foreign shareholder sue the director personally?

A direct claim may be available in certain circumstances. Otherwise, the shareholder may need to pursue a company claim or corporate liability procedure.

9. Can a criminal complaint be filed for hidden company transactions?

Yes, if the facts may involve fraud, breach of trust, unauthorized asset use, false documents, unlawful data use, or payment diversion.

10. How long does a corporate investigation take?

The duration depends on the number of transactions, the availability of records, the need for expert analysis, and whether court or criminal procedures are required.

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.

Expert Legal Support for Hidden Related-Party Transactions

Expert legal support is essential to avoid loss of rights. By working with a lawyer experienced in corporate investigations, related-party transactions, director liability, shareholder disputes, evidence preservation, and compensation claims, serving clients throughout Turkey and internationally, you can protect your legal interests.

Fırat Fesih Kaya Law Office provides professional legal support to foreign shareholders and companies facing hidden transactions, undisclosed related companies, asset transfers, corporate fraud concerns, injunction applications, and director-liability claims.

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