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Legal Alerts

Capital Markets Board Takes Action on an Unauthorized Public Offering

Legal Alerts
Capital Markets

Unauthorized Public Offering under Turkish Law

As per the Capital Market Law No. 6362 (”CML“), a prospectus must be prepared and approved by the Capital Markets Board (the ”CMB”) for the public offering of capital market instruments.

Under Article 109 of the CML, initiating a public offering without publishing a CMB-approved prospectus is defined as unauthorized public offering where those involved in such an unauthorized offering may be subject to a prison sentence from two to five years together with a judicial fine up to TRY 1,000,000 (approx. USD 175,000).

Recent Developments

  • The CMB issued a press release on October 21, 2019 announcing that Doğalkaz Ördek Yetiştiriciliği Entegre Sanayi Ticaret A.Ş. (”Company”) made a general offer to the public for the purchase of its shares, and sold its shares following such offer, according to which the CMB believes that this action constitutes an unauthorized public offering, and hence must be subject to the above sanctions.
  • In this respect, the CMB has decided to file a criminal complaint against A. Çelik, the founder of the Company and the chairman of its board of directors; and take any further precautions necessary to protect the rights and interests of the investors.


This press release marks the first time that the CMB has taken an action against an unauthorized public offering and filed a criminal complaint since 2005, which shows that the CMB will continue to closely monitor the developments as well as unauthorized activities in the market. In this respect, we believe it is of utmost importance that issuers avoid any action that may be deemed an unauthorized public offering.