KOZA-ALTIN

The UK Supreme Court has delivered a legal blow to businessman Hamdi Akin Ipek this week – overturning an earlier verdict that the English courts have jurisdiction to determine his claims concerning the authority of directors appointed by the Turkish Court. The Supreme Court - which only hears cases of the greatest public or constitutional importance – considered the European law on jurisdiction and all five of the Judges of the Supreme Court determined by unanimous decision that the English Court does not have jurisdiction over Koza Altin and its trustees in relation to the claim concerning the authority of those appointed by the Turkish Court to manage Koza Altin.

The decision is the latest in a series of defeats suffered by Mr Ipek in ongoing litigation over control of Koza Ltd, a UK-based private company wholly owned by Koza Altin, the publicly-listed Turkish conglomerate. This ruling from the UK’s highest court follows an earlier decision of the High Court that the authenticity of documents relied upon by Mr Ipek was "open to very serious doubt ". Koza Altin had produced evidence to show that a share purchase agreement created by Mr Ipek to transfer ownership of the Koza Altin group away from Turkey to a UK company owned by Mr Ipek and his family had been backdated.

In a 2017 decision, the Court of Appeal had ruled that the English Court has exclusive jurisdiction to determine whether the authority of trustees, appointed by the Turkish courts to make executive decisions at Koza Altin, should be recognised in England. Mr Ipek claimed that the trustees were appointed in breach of the European Convention on Human Rights and natural justice. However, the Supreme Court has dismissed Mr Ipek’s claim on this issue by finding that the English Court does not have jurisdiction to hear it.

The trustees had been appointed in 2015 by the Turkish Court to safeguard Koza Altin’s assets after serious criminal charges were filed against Mr Ipek who was formerly a senior executive at the Koza companies. No suggestion was made in the 2017 ruling that the trustees had not been appointed entirely lawfully in Turkey.

The trustees’ appointments were made on a temporary basis for the duration of the criminal proceedings which are ongoing in Turkey. Turkey’s Savings Deposit Insurance Fund (TMSF) has since been appointed to oversee the management of the group. The TMSF is an independent and long-established public legal entity in Turkey whose role is to safeguard the interests of depositors and investors.

Mr Ipek's claims against the individual trustees have been dismissed and his claim against Koza Altin regarding the authority of those appointed to run the Koza Altin group has also been dismissed.

Hugo Plowman, the Partner at Mishcon de Reya LLP representing Koza Altin and its former trustees, commented:

“My clients are very pleased with this victory. The Supreme Court has accepted that Turkish officers of a Turkish company who were validly appointed by a Turkish court under Turkish law should not be subject to the exclusive jurisdiction of the English Court. That has been their position all along and it is pleasing that the Supreme Court has finally decided that they were right.

Koza Altin does, of course, accept the English Court’s jurisdiction over the specific issue of English Company Law concerning Mr Ipek’s changes to the Articles of Association of Koza Ltd. My clients argue that Mr Ipek and his brother made changes to the constitution of the English subsidiary unlawfully and with the improper purpose of advancing their own personal interests. We welcome this decision by the Supreme Court which allows us to focus on taking this case to trial and not to be distracted by Mr Ipek’s other claims that have now been dismissed.”

Koza Altin’s case that will continue is that Mr Ipek and Koza Ltd are improperly and unlawfully seeking to prevent Koza Altin from exercising its rights as shareholder of Koza Ltd. Koza Altin is seeking the removal of Mr Ipek as a director of Koza Ltd in order to protect Koza Altin and its assets for the benefit of its shareholders and in accordance with its regulatory obligations. Specifically, the company (Koza Altin) is taking action to ensure that around £60m of shareholders’ capital held by Koza Ltd cannot be improperly taken out of the company and used for Mr Ipek’s personal interests.

The action is taken for the benefit of all of Koza Altin’s shareholders - including funds, banks and other Turkish and international investors who directly own 30% of Koza Altin and indirectly own a majority of 58%. Koza Altin also follows the requirements of the Capital Market Board which is the regulatory authority for the Turkish capital markets.

ENDS

View source version on businesswire.com: https://www.businesswire.com/news/home/20190729005413/en/