Disclosure and Transparency

According to the Corporate Governance Theory, organizations should implement procedures to independently verify and safeguard the integrity of the company's financial reporting. In Turkey publicly traded companies disclose two separate financial statements.

Capital Markets Board of Turkey has fined the Board of Directors of ERDEMIR for not preparing the financial statements in full compliance with standards set by CMB and not disclosing the results on time at Istanbul Stock Exchange (21/10/2006). The total fine amount is about USD 125.000.

In Turkey, some governmental bodies such as Ministry Of Finance require companies to prepare their financial statements with regard to Tax Procedure Laws while CMB requires its own standards which are very similar to International Financial Reporting Standards. In this case the problem is arised from paying dividends with respect to standards set by CMB. But the case is seem to be more complicated that the related directors did not accept these fines and declare that they will bring the issue to the court.