Dogan denies tax case appeal rejected
* Dogan official says court case continuing
* Dogan Yayin, Hurriyet, Dogan Holding shares fall
(Adds details, background)
ISTANBUL, Oct 8 (Reuters) - A legal challenge by Turkey's largest media company, Dogan Yayin (DYHOL.IS), over a demand for $3.3 billion in collateral for a tax fine is ongoing, a Dogan Holding source said on Thursday, denying a newspaper report that a court had rejected the appeal.
The dispute over alleged tax payment irregularities has raised concerns about the European Union candidate country's commitment to press freedom and there are doubts about Dogan Yayin's ability to pay the fine without selling assets.
According to Sabah newspaper, a rival of the Dogan group, four out of five court cases which Dogan Yayin opened to cancel a demand for $3.3 billion in collateral for a record tax fine had been rejected.
"The court process is continuing, as well as our demand to suspend the collateral demand. We are waiting for the verdict of the court," a Dogan Holding (DOHOL.IS) source told Reuters.
Shares in Dogan Yayin were down 4.9 percent at 0800 GMT.
Its newspaper publisher unit Hurriyet (HURGZ.IS) opened 8.3 percent lower, while group parent Dogan Holding shares lost 7.07 percent to 0.92 lira.
Dogan Yayin, which controls half of the Turkish private media market, has accused the government of singling it out because of critical coverage of Prime Minister Tayyip Erdogan's Islamist-rooted AK Party.
The government denies this, but has accused the group of acting like an opposition party.
The company's fine for alleged tax irregularities at its publishing units between 2005 and 2007 was increased to 4.8 billion lira ($3.3 billion) due to interest and penalties.
The fine is larger than the $2 billion annual sales of Dogan Yayin and is more than the combined market value of Dogan Yayin and parent company Dogan Holding, controlled by billionaire Aydin Dogan.
(Reporting by Birsen Altayli; writing by Daren Butler; editing by Simon Jessop)
((daren.butler@reuters.com; +90 212 350 7057; Reuters Messaging: daren.butler.reuters.com@reuters.net)) Keywords: DOGANYAYIN
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