With the Official Gazette dated August 17, 2024 the following sentences have been added to the first paragraph of Article 57 of the Electricity Market License Regulation (“Regulation”) (published in the Official Gazette dated 2/11/2013 and numbered 28809), to precede the last sentence:
“However, changes in the shareholding structure planned to be made other than subparagraphs (a), (b), (ç), (d), (f), (j) and (k) are subject to Board approval each time. Within this scope, in
case of a change in the shareholding structure without the approval of the Board, the pre-license in question shall be cancelled in accordance with the third paragraph of Article 6 of the Law.”
This regulation entered into force on August 17, 2024, the date of publication.
Administrative Position of the Energy Market Regulatory Authority (“EMRA”)
EMRA is a public legal entity with administrative and financial autonomy. It performs the duties and exercises the powers assigned to it by the Law on the Organization and Duties of the Energy Market Regulatory Authority. It also
performs the duties and exercises the powers assigned to it by the Natural Gas Market Law, Petroleum Market Law, Liquefied Petroleum Gases (LPG) Market Law and Electricity Market Law. As provided for in the above-mentioned laws and secondary regulations, it is necessary to obtain permission from the institution in some works and situations, while in others it will be sufficient to notify the institution.
Focus of the Regulation: Indirect Shareholders
Indirect shareholding is defined in the first paragraph of Art. 5 of the Banking Law No. 5411:
“In the implementation of this Law, in determining the indirect shareholding of natural persons, the shares belonging to a natural person and his/her spouse and children and the shares belonging to the partnerships in which they participate with unlimited liability or the shares belonging to the partnerships controlled separately or jointly by these persons or partnerships shall be taken into account together. In determining the indirect shareholding of legal entities, the shares belonging to them and the shares belonging to the partnerships controlled by them shall be calculated together.”
As can be understood from the last sentence of the provision, in determining the shares of indirect shareholders, not only the shares of the person himself/herself, but also the shares of his/her spouse, children, partnerships in which
they participate with unlimited liability, or the shares of partnerships controlled separately or jointly by these persons or partnerships shall be taken into consideration and calculated together.
Therefore, the concept of indirect shareholding derives its meaning from the fact that although shares are held by more than one person, they are considered to be concentrated in a single person due to the power of influence under particular circumstances. This situation is reflected in certain areas of the legislation, and it is an important institution in terms of the regulation to be examined below.
Implications of the Regulation:
According to the first paragraph of Article 57 of the Regulation:
“Until the license is obtained, except for the reasons of inheritance and bankruptcy, the shareholding structure of the re-license holder legal entity cannot be changed directly or indirectly, and transfer of shares or transactions that will result in the transfer of shares cannot be performed.”
It is also regulated that this provision shall not apply to the changes listed in subparagraphs a-k of paragraph 1.
The regulation dated 17.08.2024 foresees that changes in the shareholding structure other than subparagraphs (a), (b), (ç), (d), (f), (j) and (k) will be subject to the Board’s approval each time. In this case, the provision of Paragraph 1 will not
apply in the following changes but the approval of the Board will be sought:
c-) Indirect shareholding changes in the shareholding structure of a legal entity holding a pre-license due to changes in the shareholding structure of shareholders established in foreign countries,
e-) Changes that result in all indirect shareholders added to the pre-license of the pre- license holder legal entity becoming direct shareholders without changing their share ratios and changes that result in all direct shareholders
becoming indirect shareholders without changing their share ratios
g) (Amended: OG-19/11/2022-32018) Direct or
indirect share changes that do not constitute a change of control in the shareholding structure of the pre-license holder legal entity,
ğ) Direct or indirect changes in the shareholding structure of legal entities holding pre-license, more than half of the capital of which is directly or indirectly owned by public institutions and organizations, arising from capital increase and/or change of shareholders, provided that no new shareholder other than the shareholder having the qualification of public institution and organization is taken, h) Direct or indirect changes in the shareholding structure of the legal entity holding the pre-license as a result of the acquisition of its own shares by the legal entity holding the pre-license
and the direct and indirect legal entity partners of this legal entity within the scope of the provisions of the Turkish Commercial Code No. 6102,
ı) Direct or indirect share acquisitions by legal entities established in foreign countries or by legal entities controlled by these legal entities and established within the scope of the Turkish Commercial Code No. 6102, in the legal entity
holding the pre-license by using foreign resources,
i) Direct or indirect shareholding structure changes in the shareholding structure of the legal entity holding the pre-license as a result of the share transfers made between real persons who have direct or indirect shares in the shareholding structure of the legal entity holding the pre-license and who have first degree blood kinship between them and their spouses
In Light of the Explanations
Legal entities operating in the electricity market and planning to make changes as described above will need to work more meticulously in terms of compliance with the administrative terms and conditions within the scope of pre-license
arrangements, since EMRA’s approval is in question. It should be underlined that EMRA, as an administrative authority, has increased supervisory authority over all domestic and foreign legal entities within the scope of the regulation and that any violation of the regulation rules in making all changes within the scope of the regulation in terms of the approval process will be canceled in accordance with Article 6, Paragraph 3 of the Law.
