Individual Application

The Facts

The applicant claimed that as the immovable property which he and his brother wished to purchase had been owned by a company, they became owners of the company on 7 April 2016 by taking over the registered share certificates by way of endorsement. Founders of the company, C.Y. and M.K., against whom an arrest warrant had been issued on 29 July 2016 for their alleged involvement in the Fetullahist Terrorist Organisation / Parallel State Structure (“FETÖ/PDY”) resigned from membership of the board of directors by virtue of the resolution published in the Turkish Trade Registry Gazette dated 10 October 2016. Accordingly, the applicant and his brother became a member of the board of directors, and the trade name of the company was changed through the same resolution.

Upon the request of the incumbent chief public prosecutor’s office, a precautionary seizure was ordered on all rights and claims, negotiable instruments, partnership interests, contents of the safe-deposit boxes, and all other movable properties of the company. The applicant and his brother challenged this order, arguing that they had acquired the company’s registered share certificates on 7 April 2016 through endorsement and registration in the share ledger and maintaining that M.K. and C.Y. had no association with the company from that date onwards. Their challenge, however, was dismissed by the magistrate judge. Following a subsequent request from the chief public prosecutor’s office, the Savings Deposit Insurance Fund (“Fund”) was appointed as trustee to the company, and the applicants’ subsequent challenge to this appointment was also dismissed.

The Applicant’s Allegations

The applicant maintained that the right to property had been violated due to the precautionary seizure of the assets owned by the joint-stock company and the appointment of a trustee to manage the company.

The Court’s Assessment

In the present case, the assets of the company, of which the applicant was a partner and manager, were seized on suspicion of being acquired through offence or intended for use in criminal activity, and the Fund was appointed as trustee to the company to manage these assets. It is clear that seizing assets on suspicion of being acquired through offence or intended for use in criminal activity and appointing a trustee for their management are practices generally deemed appropriate to prevent the financing of terrorism and to secure the enforcement of a potential confiscation. In consideration of the serious doubts by the public authorities about the legality of the company’s share transfer, it has been concluded that the precautionary measures employed in the present case satisfy the appropriateness test.

The procedure of appointing a trustee to companies, which entirely terminates a company’s management authority, amounts to an extremely severe interference that can only be justified under very exceptional circumstances. Given the complex structure of FETÖ/PDY and its revenue generation methods, the appointment of a trustee to companies becomes justified when concrete evidence demonstrates that the impugned revenues were derived from an offence related to the terrorist organisation’s activities or are intended for use in the commission of a terror-related offence. In this context, the Court has found necessary the appointment of a trustee in the present case.

Besides, the applicant maintained that they were not in a position to know any association between these individuals and the said organisation, and that they had acquired the company’s shares lawfully and cannot be held accountable for the actions of the former owners. Although the applicant claimed that the transfer had occurred on 7 April 2016, the public authorities noted that the change in the company’s trade name and formation of the board of directors coincided with the post-coup attempt period, which they found significant. Given the margin of appreciation afforded to the public authorities, the Court has found reasonable the public authorities’ consideration that the impugned interference was necessary under the particular circumstances of the present case.

Moreover, the applicant’s decision to purchase not the immovable property itself but the shares of the consulting company owning it raises suspicions. In addition, the date of the company’s trade name change precedes the seizure of the company but chronologically follows the decision ordering the seizure of all assets belonging to the law firm jointly owned by M.K. and C.Y. who had been subject to an investigation for their alleged membership of the said terrorist organisation. The delay of approximately six months in holding a general meeting, despite the transfer of registered share certificates of the company, also raises serious questions. Furthermore, the suspects, who were renowned figures according to the applicant, reportedly remained active in the company’s management despite being detained on remand. It is also remarkable that the request for the change of the company’s trade name in the register was submitted to the land registry office about two years after its trade name had been changed. Given the applicant’s stated intention to acquire property by purchasing the company’s shares, the prolonged delay in undertaking the necessary transaction does not seem reasonable. Moreover, it is also particularly interesting that the applicant and his brother, the majority shareholders of the company, claim to have been unaware of the company’s seizure and the trustee’s appointment until they applied to the land registry office for the registration procedure.

In the light of these explanations, the Court has concluded that the public authorities did not make an error of judgment, nor did they act arbitrarily in deeming the transfer of the company’s shares by the applicant to be a sham. It has accordingly held that the impugned measures in the form of seizure of the company and appointment of a trustee did not place an excessive burden on the applicant, nor did they upset the fair balance between the personal interest in protecting the right to property and the public interest in employing these measures, to the detriment of the applicant.

Consequently, the Court has found no violation of the right to property.