Because of the functions performed by VC Investment Companies and the special conditions under which they exist, certain attributes are required for both their shareholders and their directors. In the case of conversions into VC Investment Companies, the existing shareholders must possess the qualifications specified in article 6 of the Communiqué. Accordingly, existing shareholders:
- Must not be insolvent, entered into a concordat with creditors or be the subject of a bankruptcy postponement decision,
- Must not be among those persons responsible for events leading the CMB to sanction the institution in question by cancelling one of its operating licenses,
- Must not have been convicted of one of the crimes listed in the CMLaw by a verdict that has become final,
- Must not be the subject to an order of insolvency concerning themselves or any institution in which such they are a partner under the now repealed Governmental Decree in Force of Law no 35 on Activities of Bankers in Insolvency dated 14 January 1982,
- Must not have been convicted to imprisonment for five years or more due to a maliciously committed crime, must not have been convicted of a crime committed against the security of the state, crimes committed against the constitutional order and the functioning of this order, the crimes of embezzlement, extortion, bribery, theft, fraud, forgery, abuse of confidence, fraudulent bankruptcy, collusive tendering, fraud in terms of discharging an obligation, hindrance or destruction of an information system, deletion or alteration of data, abuse of bank or credit cards, laundering criminal proceeds, smuggling, tax evasion or unjust enrichment, even if the durations indicated in Article 53 of the Turkish Criminal Code no 5237 dated 26 September 2004 have elapsed,
- Must possess the integrity and reputation required by the business,
- Must not have outstanding tax debts,
- Must not have been convicted for any of the crimes listed in the Law on the Prevention of Financing Terrorism,
- Must not have been banned from transacting pursuant to article 101/1-(a) of the CMLaw.
With respect to applications for conversion filed by publicly held companies, only those shareholders who hold shares with management control are required to satisfy these conditions.
According to article 6 of the Communiqué , if the founding or existing shareholder is a bank then the application for incorporation or conversion shall be subject to special provisions.
The requirement that VC Investment Company shareholders and directors possess the above-mentioned attributes aims to ensure a level of trust and expertise both in the corporate sense and between the aforementioned persons. In addition to the fact that VC Investment Companies can only achieve their specialized purpose with a qualified team, because trust and expertise are important for third persons who will be entering into relationships with VC Investment Companies, the requirement of such qualifications in VC Investment Company shareholders and directors is on point.
Who is a Leading Shareholder?
For conversion at least one of the leading shareholders must be a leading shareholder. The specific conditions regarding leading shareholders are set forth in article 7 of the Communiqué. According to the definition provided in the referred article, a leading shareholder “refers to the shareholder or shareholders who, if the company does not have privileged shares, alone or jointly hold shares giving management control over the company, or if the company has privileged shares, alone or jointly hold shares in at least 25% of capital, also including the majority of privileged shares giving management control over the company, except for acquisition of shares after public offering.” If there are one or more leading shareholders, each natural person or legal entity being a leading shareholder must not only meet the requirements set forth in the Communiqué for VC Investment Company founders but also the criteria listed in article 7 of the Communiqué.