Foreign capital in Turkey and the trustee law change
Together with the amendment to the law on the Supreme Court of Appeals submitted to parliament, the regulation on the appointment of caretakers to companies has drawn a huge reaction from the business world. Upon this reaction, the parliamentary commissions withdrew related articles, especially those concerning the Capital Market Law, thus relieving the business world.
The prestigious Turkish Industry and Business Association (TÜSİAD) issued a statement saying “the regulation on the appointment of caretakers needs to be re-evaluated in terms of the significant risks it may cause, particularly in the fields of commercial life and the right to private property.” TÜSİAD officials later told me that their objections had been assuaged to some extent by the withdrawal of some articles.
TÜSİAD had complained that they conveyed their objections to government officials but the regulation was introduced without evaluating them. Obviously with the last-minute withdrawal of certain articles, this situation ended. The regulation had the potential to negatively affect routine commercial life and risked violating the right to property. TÜSİAD also drew attention to the regulation’s noncompliance with other crimes included in the Law of Criminal Procedure, conflicting with the principles of discretion and proportionality, containing risks in terms of legal technique and codes of practice. It would also have disrupted the integrity of the law by introducing new terms to already present measures in the Capital Market Law.
So the articles concerning the Capital Market Law have been withdrawn. But legal experts still draw attention to the regulation introduced to the trustee appointment mechanism, which they say distorts the mechanism’s aim - increasing its powers and including the danger of violating property rights.
Legal experts seem to be particularly focusing on increases to the powers of trustees while at the same time trustees are exempted from responsibility. Justifiably, they remind us that even in the existing practice, the trustee mechanism was already not functioning correctly. They now fear that with the new regulation, this mechanism would totally exceed its aim.
Danger to private property rights
This regulation will also change the nature of appointed trustees. They currently function as temporary technical staff appointed to allow the institution to survive, but the new regulation will introduce a continuous mechanism allowing trustees to continue as public employees.
Such a situation may lead to the seizure of private property, violating private property rights. The further empowered trustee will be able to sell and buy the goods and property of the company they are appointed to; in other words, they will have tenure on the property rights, which would mean risking the right of property.
Turkey is a country with limited resources, in need of foreign capital for economic growth. For this to continue, it clearly has to be a country in harmony with international rules and fundamental rights, ruled by global norms. If it is not, it would only be a dream for foreign capital to keep flowing.
Well, when there is such a necessity, can it not be seen that a regulation endangering property rights would pose a serious risk to the economy?