Limitations on Dividend Distribution due to Covid-19

In today's (17/05/2020) Official Gazette, the Communiqué on the implementation of the provisional Article 13 of the Turkish Commercial Code limiting the distribution of dividends has been published. 

According to the Communiqué,

-        Advance profit distribution authorization should not be given until 30.09.2020 in capital companies. For previous authorizations, payments should be made after this date.

-        If it was decided to distribute dividends before 17.04.2020, and if the dividends have not been paid or partial payments have not been made payments exceeding 25% of 2019 net profit should be made after 30.09.2020. Interest should not be accrued for these deferred payments.

For the following exceptions related with the distribution of dividends, it is mandatory to obtain an appropriate opinion from the Ministry.

"Exceptions for Dividend Distribution" are as follows:

-        Dividend distribution of 120k TL or less, excluding those who benefited from short-time working allowance and unpaid leave due to the new coronavirus (Covid-19) and those who used Treasury-backed loan bail and have unpaid credit debt balance,

-        Using more than 50% of the dividend decided to be distributed in cash and one-off payment of the capital commitment in another capital company,

-        The dividend decided to be distributed needs to be used in cash payments for credit and project financing contract liabilities which are due to 30.09.2020.