Inadmissibility Of The Allegation Of Violation Of The Right To Property Due To The Failure To Reflect The Capital Increases Of The Public Bank Paid By The Treasury To The Shares Belonging To Private Persons
Events
In 1955, the applicant’s grandfather S.T. purchased one share certificate of a public bank with a nominal value of 100 TL.
Since its establishment, the bank had carried out several capital increases through rights issues; except for those carried out between 1984 and 2000, when the bank was subject to the Decree Law No. 233 on State Economic Enterprises, shareholders were granted pre-emptive rights. Since none of the shareholders exercised this right, all of the capital increase amounts were paid by the Treasury. In the capital increases made between 1984 and 2000, shareholders were not granted pre-emptive rights as required by law, and all capital increases in this period were paid by the Treasury.
With the provisional article 9 added to the Law No. 4603 on Ziraat Bank of the Republic of Turkey, Türkiye Halk Bankası Anonim Şirketi and Türkiye Emlak Bankası Anonim Şirketi with the article 27 of the Law No. 5615, the share certificates of shareholders other than the Privatisation Administration with a nominal value of TL 100 were converted into 1 share certificate with a nominal value of 1 new Turkish lira (YTL). The shares of S.T. with a nominal value of TRY 100 became shares with a nominal value of TRY 1 according to this Law.
S.T.’s shares were transferred to the applicant in 2008. The applicant filed a lawsuit requesting that the share price of TRY 100 be adjusted in proportion to the current capital of the bank and that the transaction regarding the determination of the value of the share as TRY 1 be cancelled and determined in accordance with the current market value. As a result of the judgement, the court rejected the lawsuit. The applicant appealed against the decision and the Court of Cassation upheld the court’s decision.
The applicant also applied for the correction of the judgement, but the applicant’s request for correction of the judgement was rejected.
Allegations
The applicant claimed that his right to property was violated as the nominal value of the shares of a state-owned bank was not updated and was reduced by law.
The Court’s Assessment
Public acts that reduce the economic value of property or deprive the applicant of the economic benefit expected from the property must be considered to constitute interference with the right to property.
The applicant mainly complained that the value of his share was not updated and its nominal value was reduced from 100 TL to 1 TL.
In the concrete case, since the Treasury paid for all capital increases of the bank, the proportion of the Treasury’s share increased. However, the proportional decrease in the applicant’s share does not mean that its value has also decreased. Although the total value of the bank increased, the value of the applicant’s share did not decrease. On the other hand, even if the total assets and value of the bank increases as a result of capital increases through rights issues, it is inconceivable that the shareholders who did not participate in the capital increase and did not pay the price will benefit from this increase.
The right to property regulated under Article 35 of the Constitution does not guarantee that the share ratio of the shareholders of the company remains constant or that all shareholders – even if they do not pay a fee – have the same share in the capital increased through rights issues. Otherwise, shareholders who did not participate in the capital increase would be unjustly enriched. Therefore, it is considered that the applicant’s claim that his shareholding should be updated and adjusted according to the current capital status of the company has no basis.
The fact that the shareholders did not participate in the capital increases between 1984 and 2000, when the Bank was included in the status of a state-owned enterprise, affected the exercise of the shareholding rights of the applicant’s deceased. However, all of the capital increases made during this period were paid by the Treasury and the applicant did not make any payment. Therefore, the applicant’s claim that the applicant should benefit from the economic value added to the company’s assets with the capital increases made between 1984 and 2000 in proportion to his shareholding in 1955 is also unfounded.
Finally, it is understood that the main reason for the completion of the applicant’s share certificate with a nominal value of 100 TRY to 1 share certificate with a nominal value of 1 YTL was the removal of six zeros from the Turkish lira. The legislator converted the shares traded in Turkish Lira into YTL. During this conversion process, the applicant has not suffered any loss, on the contrary, the applicant has been treated in favour of the applicant.
While the applicant’s share certificate with a nominal value of 100 TRY was 0.0001 in YTL, it was increased to 1 TRY with the aforementioned legal provision. Therefore, the applicant’s share certificate did not suffer any economic loss due to this transaction. In this case, it is concluded that the applicant has not been able to justify that the public authorities have interfered with his right to property even though he has benefited from all procedural opportunities granted to him.
For the reasons explained above, the Constitutional Court ruled that the allegation of violation of the right to property was inadmissible due to manifestly lack of grounds.
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