In brief
- Owning all the ordinary shares in a company does not always give you full control.
- A special class of shares, asymmetric protections and veto rights can leave an investor unable to replace management or secure an exit.
- Before investing, ask not just who owns the business, but who controls it and who can decide its future.
- If a conflict does arise, ensure that you have explored all potential alternatives before seeking to wind up a company.
- However, this does not mean that you have to accept any alternative to a winding up – reasonable concerns can justify declining to pursue such alternatives.
The case
Türk Altin Işletmeleri A.Ş v Koza Ltd and Anor [2026] EWHC 2528 (BP), the High Court ordered Koza Ltd to be wound up after a prolonged stand-off between its shareholder and sole director.
The fight for control
Altin is a major Turkish gold production and mining company listed on the Istanbul Stock Exchange.
Following investigations and legal actions linked to the Gülenist political movement, the Turkish courts appointed trustees over Türk Altin, and later transferred the group's management to the Savings Deposit Insurance Fund (TMSF) and the Ministry of Finance. In August 2024, a presidential decree officially transferred the privately held shares to the Turkey Wealth Fund.
Altin has an English subsidiary, Koza Ltd. Türk Altin owns all of Koza Ltd’s ordinary shares, giving it all material rights to dividends and distribution. However, the sole director of Koza Ltd, Mr Ipek, holds a golden "A" share. Although granting Mr Ipek only nominal economic rights, it gives him powerful vetoes over board changes and voluntary liquidation. The validity of the "A" share remains disputed in separate proceedings, but for the purposes of the winding-up proceedings it was assumed to be valid.
Altin had lost confidence in Mr Ipek's management of Koza Ltd. However, as a result of the A share, Türk Altin could not remove him from management. A deadlock ensued, leading to a decade of disputes over jurisdiction, remuneration, investments and spending, generating approximately 27 court applications, 18 High Court hearings, 4 Court of Appeal hearings and a trip to the Supreme Court.
One battle concerned Mr Ipek's desire to spend £3 million of company money to fund his family company’s ICSID arbitration against the Republic of Turkey. This prompted significant court decisions about what it means to spend money in the “ordinary and proper course” of business when subject to a freezing injunction or similar form of undertakings. Türk Altin and Mishcon de Reya also uncovered and produced evidence challenging the authenticity of Mr Ipek's underlying share purchase agreement, which the High Court found was “open to very serious doubt”. And the ICSID arbitration failed in 2022 because restructuring through a UK company to secure treaty protection in the way that he had was held to be an abuse of process.
The winding up petition
Türk Altin determined that Koza Ltd could not continue to operate in this manner. It therefore presented a petition to wind up the company on the ground that it would be "just and equitable" to do so due to the deadlock between it and Mr Ipek. It then applied to have the company wound up on a summary basis (i.e. without a full trial). It was Turk Altin's position that its winding-up petition was ripe for summary judgment; the deadlock between it and Mr Ipek being a matter of record in numerous Court decisions.
Unusually, neither the board nor the voting shareholders were split: the deadlock was between the owner and management. The court nevertheless recognised that a conflict of this nature could justify winding up. However, at the hearing of Turk Altin's first summary judgment application the court declined to make the winding up order.
Why did the court initially hold back?
English courts can put a company into liquidation where it is “just and equitable”, including to resolve management deadlock. But winding up a company is a last resort. The court's power to wind up a company on this basis is expressly limited by statute, requiring that the court be satisfied that there is no alternative remedy that the applicant has "unreasonably" declined to pursue
Türk Altin's first application for summary judgment on its winding up petition, the judge, stopping short of winding up, concluded that there was another route available to break the deadlock and wind down the operations of Koza Ltd: Article 4 of Koza Ltd’s articles (based on the Model Articles) allowed shareholders to direct the directors by special resolution (requiring support from at least 75% of voting shareholders). Türk Altin had already passed resolutions; and further lawful directions appeared to the Court to be capable of breaking the impasse. Further, Mr Ipek’s undertaking to the Court that he would recognise Türk Altin’s directors’ authority to act for it as shareholder in this context appeared to the Court to make this route out of deadlock viable. The judge therefore refused summary judgment on the first occasion.
What changed?
With encouragement from the Court's first decision, Türk Altin passed further special resolutions, including resolutions to wind down the operations of Koza Ltd. However, despite the undertaking he had given to the Court, Mr Ipek resisted implementing these resolutions. He now argued that compliance would breach his fiduciary duties to Koza Ltd. Türk Altin therefore issued a second application for summary judgment on its winding up petition, on the basis that the route out of the deadlock as envisaged by the Court had not worked.
In reaching its decision to order the winding up of Koza Ltd on this second application, the Court rejected Mr Ipek's argument that complying with the special resolutions would mean breaching his fiduciary duties. The Judge held that a director cannot generally override a valid Article 4 direction because he or she disagrees with it or prefers another course. However, normal director duties may still govern how it is implemented. The Judge also said that shareholders, unlike directors, can generally act in their own interests, rather than the company's interests, when passing such special resolutions (subject to limits including illegality and minority oppression).
So, whilst shareholders cannot require a director to act unlawfully or fraudulently, or override restrictions in the articles or sidestep duties to creditors, they can flex their legal muscles to exert control by lawful special resolution. Here, winding down the business by a series of special resolutions did not breach the A shareholder’s veto powers, and so Mr Ipek had no legitimate basis for refusing to implement them.
However, the Judge was satisfied that, given his previous behaviour, Mr Ipek would seek to resist Türk Altin's directions by any means possible. The court therefore ordered the winding up of Koza Ltd by summary judgment, without a full trial.
Did the owner have to sell instead?
An available alternative, including a share sale, can prevent winding up if the shareholder unreasonably refuses to pursue it. But this does not mean that a purchase offer automatically obliges an owner to sell. This judgment demonstrates that shareholders are entitled to adopt a sceptical attitude to such approaches, particularly where they believe they are being driven by the board that they are in conflict with.
In this case, one bidder, a company named ETS Mining Corporation, supplied a letter purportedly from Truist Bank showing resources of over US$57 million. Türk Altin discovered that the supposed signatory had never worked at the branch, and the bank manager doubted the letter’s authenticity. The judge found “good evidence” of forgery and accepted that Türk Altin refusing to engage with the offers from ETS was reasonable.
What should owners and investors do?
- Check control provisions before investing. However small another party’s holding, examine director appointment and removal rights, special shareholder rights, deviations from Model Articles, vetoes and exit restrictions in the articles and the terms of any shareholders’ agreement.
- Build in a workable exit. Investors should test whether governance rights support their exit plans or obstruct them.
- Use available remedies and keep written records. Consider shareholder directions and realistic alternatives. Record refusals to cooperate and reasons for rejecting a sale or other solution.
Where entrenched management prevents a shareholder from exercising control, winding up may be available as a route through deadlock, but only as a last resort.
Mishcon de Reya acted for Türk Altin in these proceedings.