Majority Shareholder Pays Excessive Management Fees in Turkey: Can Minority Investors Challenge Them? (2026 Updated Guide)

Can minority investors challenge excessive management fees paid by a majority-controlled Turkish company? Learn about related-party payments, shareholder rights, director liability, repayment claims, evidence and urgent legal remedies.

A majority shareholder in a Turkish company may control voting power, influence management appointments and play a decisive role in major corporate decisions. However, majority ownership does not provide an unrestricted right to extract company assets through excessive management fees, consultancy payments, service agreements or other related-party transactions. If a controlling shareholder causes the company to pay commercially unjustified amounts to itself, its affiliates, directors or related persons, minority investors may have several legal options depending on the company’s structure and the circumstances of the transaction.

The central legal questions are whether the services were actually provided, whether the amount was commercially reasonable, whether the transaction served the company’s interests, whether the corporate approval process was lawful and whether the arrangement caused loss to the company or unfairly benefited the controlling shareholder. Lawyer Fırat Fesih Kaya evaluates these disputes by examining the corporate resolutions together with the underlying financial flow because the formal description of a payment as a “management fee” does not by itself establish that the transaction was legitimate.

Can a Majority Shareholder Charge Management Fees to the Company?

Potentially. There is no general principle under which every payment involving a controlling shareholder or related company is automatically unlawful. A company may genuinely purchase management, consultancy, technical, administrative or other services from a shareholder or affiliated enterprise.

The problem begins when the payment cannot be commercially justified. Minority shareholders should investigate whether the service existed, whether the company actually benefited from it and whether the amount reflects a genuine commercial arrangement.

Majority Control Does Not Mean Ownership of Company Assets

One of the most important distinctions in shareholder disputes is between ownership of shares and ownership of corporate assets. Even a shareholder holding a substantial majority does not personally own the company’s bank accounts, receivables or other assets.

Company property belongs to the company itself.

Accordingly, controlling voting rights cannot automatically justify transferring corporate wealth to the majority shareholder.

What Makes a Management Fee Suspicious?

Several circumstances may justify closer investigation. These include a sudden increase in management fees, payments substantially exceeding previous years, fees paid without a written agreement, vague descriptions such as “consulting services,” payments to newly created related companies, repeated round-number transfers, fees unrelated to measurable services or payments that increase while the company’s profitability deteriorates.

The overall transaction should be examined rather than relying on a single indicator.

Was a Genuine Service Actually Provided?

This is often the first factual question.

The controlling shareholder should be able to demonstrate what services were performed. Depending on the transaction, relevant evidence may include agreements, invoices, reports, correspondence, personnel records, project documents and evidence showing the commercial benefit obtained by the company.

An invoice alone does not necessarily establish the commercial substance of a transaction.

Is the Amount Excessive?

Even where genuine services were provided, the amount may still be challenged if it is substantially disproportionate to their commercial value.

A comparison may be made with previous payments, market pricing, fees charged by independent service providers, the scope of work and the financial position of the company.

Independent financial or sector-specific expert evidence can become particularly important.

Related-Party Transactions Require Careful Examination

Management fees frequently involve companies controlled by the same shareholder. For example, the operating company may pay substantial annual fees to a consulting company owned by the majority shareholder.

Minority investors should identify the ultimate beneficiary of the payment rather than stopping at the immediate recipient.

Follow the Money

Bank records can be more informative than corporate resolutions.

The investigation should identify when the payment was made, which account received it, whether money subsequently moved to the controlling shareholder or another affiliate and whether similar transactions occurred repeatedly.

A transaction map can reveal patterns that are difficult to see from financial statements alone.

Review the Management Services Agreement

Where a written agreement exists, examine when it was executed, who signed it, how fees are calculated, which services are required, whether the agreement renews automatically and whether termination is possible.

An agreement signed by persons connected with the controlling shareholder deserves particular scrutiny where the company receives little measurable benefit.

Corporate Approval Procedures Matter

The company’s articles of association, board or managers’ resolutions and general assembly records should be reviewed to determine how the transaction was approved.

The existence of a formal resolution does not necessarily resolve every question concerning liability, conflict of interest or abuse of control.

Conflict of Interest Can Be Central

Where a director, manager or controlling shareholder participates on both sides of a transaction, conflict-of-interest issues should be examined carefully.

The legal analysis depends on the corporate form, the person’s position and the precise decision-making procedure.

Can Minority Shareholders Request Company Records?

Shareholder information and examination rights can be critical in uncovering related-party payments. The exact scope and procedure depend particularly on whether the company is structured as a joint-stock or limited liability company.

Minority investors should request specific records rather than making an excessively broad demand for every company document.

What Documents Should Be Requested?

Important evidence can include management-service agreements, invoices, bank records, general ledger entries, board or managers’ resolutions, general assembly minutes, annual financial statements, related-party transaction records and supporting documentation demonstrating services allegedly performed.

Electronic correspondence may also become relevant.

Accounting Records Can Reveal Hidden Payments

The disputed transfer may not always appear under a straightforward heading such as “management fee.”

Payments can potentially be recorded as consultancy, administrative services, commissions, license fees, expenses, bonuses, intercompany charges or other accounting categories.

A forensic accounting review may therefore be useful.

Can Minority Investors Challenge a General Assembly Resolution?

Potentially. If the disputed payment or related arrangement is connected with a general assembly resolution, the legality of that resolution should be examined immediately.

Depending on the circumstances, remedies concerning invalidity or cancellation of corporate resolutions may be relevant, and procedural deadlines can be important.

Minority shareholders should not wait until the company’s assets have been substantially depleted before reviewing the resolution.

What If the Majority Uses Its Votes to Approve the Transaction?

Holding sufficient votes to pass a resolution does not automatically immunize every decision from legal review.

The exercise of majority power remains subject to the mandatory corporate-law framework and principles governing shareholder and company interests.

Equal Treatment May Become Relevant

A corporate structure that systematically benefits the controlling shareholder while economically disadvantaging minority investors may require examination under principles protecting shareholders from abusive corporate conduct.

The facts must nevertheless be analyzed transaction by transaction.

Can Excessive Fees Be Treated as an Indirect Distribution of Value?

In economic substance, an excessive related-party payment may transfer value away from the company and toward the controlling shareholder.

Whether this creates a particular corporate, tax or liability consequence depends on the facts, but minority investors should examine the substance of the payment rather than merely its accounting label.

Company Loss Is Important

Suppose the company pays a related entity a management fee of an amount far exceeding the reasonable value of services received. The difference may represent an economic loss to the company.

That corporate loss can become important when evaluating responsibility of directors, managers or other persons involved.

Director and Manager Liability May Arise

Members of corporate management are expected to perform their duties in accordance with applicable legal and corporate obligations.

If management knowingly approves commercially unjustified payments that cause company loss, potential liability should be assessed under the relevant provisions of Turkish corporate law.

Majority Shareholder Liability Can Require Separate Analysis

The majority shareholder’s legal position should be distinguished from that of a board member or manager.

If the same person acts both as controlling shareholder and corporate manager, different grounds of responsibility may potentially overlap.

Group Companies Require Additional Analysis

Where the company forms part of a corporate group, transfers benefiting a controlling enterprise or another group company may raise additional questions under Turkish rules concerning groups of companies and exercise of control.

The analysis should examine whether the controlled company suffered loss and, where applicable, whether that loss was properly addressed under the relevant corporate framework.

Minority Investors Should Examine the Entire Related-Party Structure

A management-fee dispute may be only one part of a larger pattern.

Other transactions can include inflated rent, excessive royalties, shareholder loans, related-party purchases, asset transfers, commissions, guarantees or payments to family members.

A comprehensive review can therefore be more effective than challenging a single invoice.

Can Minority Investors Demand Repayment?

Potentially, depending on the legal basis and facts. If company funds were transferred without a valid basis or responsible persons caused recoverable corporate loss, claims seeking restoration of value may need to be evaluated.

The correct claimant and cause of action are important because the economic loss may belong directly to the company rather than individually to each shareholder.

Direct Shareholder Loss and Company Loss Are Different

This distinction is essential.

A decrease in share value caused by damage to the company does not necessarily mean that the shareholder can personally recover the entire corporate loss.

The claim should be structured according to who legally suffered the relevant damage.

Can Minority Investors Seek an Injunction?

Where there is an imminent risk of additional transfers, urgent interim measures may become important.

For example, evidence showing a planned substantial payment to a related company may justify evaluating whether interim judicial protection is available before the money leaves the company.

The requirements depend on the requested measure and supporting evidence.

Bank Records Should Be Preserved Early

Once a dispute becomes visible, parties may change accounting descriptions, terminate agreements or reorganize transactions.

Minority investors should therefore identify and preserve legally obtainable evidence promptly.

Electronic Evidence Can Be Important

Emails, internal messages, accounting-system records and board communications may reveal how the fee was determined and whether management knew that the services had little commercial value.

Evidence should be obtained and preserved lawfully.

Independent Valuation Can Strengthen the Case

If the dispute concerns whether a management fee was excessive rather than entirely fictitious, an independent expert can compare the fee with the market value of equivalent services.

This can transform an abstract allegation into a quantifiable financial claim.

What If the Company Is Profitable Despite the Fees?

Profitability does not automatically make every transaction lawful.

A profitable company can still suffer substantial loss through excessive related-party payments. The proper question is whether the transaction itself was justified and whether the company received appropriate value.

What If Minority Shareholders Previously Approved the Accounts?

Past approval of financial statements or corporate decisions can affect the legal analysis, but it should not automatically be assumed to eliminate every possible claim.

The precise resolution, information disclosed to shareholders and nature of the disputed conduct should be examined.

Concealed Transactions Can Change the Analysis

If shareholders were told that a payment represented ordinary operational expenses but the money actually benefited the majority shareholder, disclosure and knowledge become important.

The date on which minority investors discovered the true transaction can also become relevant to procedural strategy.

Tax Consequences Should Be Reviewed Separately

Excessive related-party payments can also create tax issues involving deductibility, transfer pricing or disguised distribution of profits.

Corporate-law remedies and tax consequences should not be treated as the same proceeding, although the underlying evidence may overlap.

Criminal Liability Is Not Automatic

An excessive management fee does not automatically constitute a criminal offence. Many shareholder disputes remain commercial and corporate matters.

However, if the evidence indicates fabricated invoices, falsified records, unauthorized transfers or other potentially criminal conduct, a separate criminal-law assessment may be required.

Minority investors should avoid using criminal allegations merely as leverage in an ordinary valuation dispute.

Foreign Minority Investors Face Additional Practical Problems

A foreign shareholder may not have access to daily accounting information, may rely on local management and may discover related-party payments months later.

Regular financial reporting, audit rights and carefully drafted shareholder agreements can therefore be especially important for foreign investors.

Review the Shareholders’ Agreement

A shareholders’ agreement may impose additional restrictions on related-party transactions.

Reserved matters, minority consent rights, spending limits, audit rights and information covenants may provide contractual remedies beyond statutory corporate rights.

Reserved Matters Can Be Powerful

International investors frequently negotiate provisions requiring minority approval for related-party transactions exceeding a particular threshold.

If such a clause exists, determine whether management fees were deliberately divided into smaller transactions to avoid the approval threshold.

Review Bank Signing Authority

If questionable payments continue, determine who has authority over company bank accounts.

Changes to signing authority, dual-signature requirements or corporate approvals may become part of a broader protective strategy, subject to the company’s governance documents and applicable law.

Consider a Special Audit

Depending on the corporate form and statutory requirements, minority shareholders may evaluate mechanisms allowing examination of specific suspicious transactions.

A properly focused request concerning management fees, related-party transfers or a defined accounting period can be more effective than a general allegation of misconduct.

Shareholder Exit Rights May Become Relevant

Where abusive related-party transactions form part of a broader and persistent shareholder conflict, the dispute may eventually raise questions concerning exit, dissolution, share valuation or other structural remedies depending on the corporate form and circumstances.

These remedies should generally be evaluated alongside, rather than instead of, immediate protection of company assets.

Do Not Ignore Limitation and Corporate Deadlines

Different claims may have different procedural and limitation periods.

General assembly challenges in particular can involve short statutory periods. Minority investors should therefore obtain legal analysis immediately after learning of the disputed decision.

Practical Evidence Checklist for Minority Investors

A strong file should establish the payment, recipient, relationship with the majority shareholder, contractual basis, corporate approval, actual services, market value and financial damage.

Bank statements, invoices, contracts, accounting ledgers, corporate resolutions, correspondence and expert reports should be organized chronologically.

2026 Strategy for Foreign Minority Shareholders

A foreign investor who discovers excessive management fees should avoid focusing exclusively on the amount transferred. The broader objective should be to establish who authorized the transaction, who ultimately received the economic benefit, what service was actually provided, whether the fee was commercially reasonable and what loss the company suffered.

Where payments are continuing, urgent protection should be considered before litigation over historical losses becomes the only remaining option.

Frequently Asked Questions

Can a majority shareholder legally receive management fees from a Turkish company?

Potentially, if there is a genuine legal and commercial basis and the transaction complies with applicable corporate requirements. Majority ownership alone does not justify extracting company assets.

Can minority shareholders challenge excessive fees?

Potentially. Available remedies depend on the corporate structure, approval process, relationship between the parties and evidence of company loss.

Is an invoice enough to prove that management services were provided?

Not necessarily. The underlying services, agreement and commercial benefit should also be examined.

Can minority investors inspect company records?

Turkish corporate law provides shareholder information and examination mechanisms, but their scope and procedure depend on the corporate form and circumstances.

Can a general assembly resolution approving the payments be challenged?

Potentially. The legal basis and applicable procedural deadlines should be reviewed immediately.

Can directors be personally liable for approving excessive payments?

Potentially, where the legal requirements for management liability and corporate loss are established.

Can the court stop future management-fee payments?

Interim judicial protection may potentially be available where the applicable requirements are satisfied and there is evidence of imminent harm.

Can the minority shareholder personally recover all money paid?

Not necessarily. If the direct loss belongs to the company, the claim must be structured accordingly. Corporate loss and direct shareholder loss should be distinguished.

What if the payments went to another company owned by the majority shareholder?

That relationship should be investigated as a related-party transaction, including the ultimate beneficiary and commercial substance of the services.

What should a minority investor do first?

Obtain the corporate and financial evidence before treating the dispute merely as a disagreement about the amount of the fee. The strongest case connects the payment to the controlling shareholder, establishes the absence or inadequate value of the underlying service, identifies the corporate approval process and quantifies the resulting loss to the company.

Client-Focused Legal Support for Minority Shareholder and Related-Party Disputes

Disputes over excessive management fees can involve abuse of majority control, related-party transactions, shareholder information rights, corporate resolutions, director liability, company loss, repayment claims, interim measures and forensic examination of financial records.

Fırat Fesih Kaya Law Office assists foreign investors, minority shareholders and international companies in shareholder and corporate disputes involving Turkish companies. Lawyer Fırat Fesih Kaya provides legal assistance in investigating suspicious related-party payments, reviewing corporate resolutions and financial records, protecting minority shareholder rights, seeking urgent judicial measures and pursuing corporate liability and recovery claims where legally available.

Phone: +90 312 434 22 22

Mobile / WhatsApp: +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