Dogan provides collateral for tax fine
* Ruling applies to 915 mln lira collateral demand
* Company sees as precedent for 4.8 bln lira demand
(Adds quotes, details, background)
ISTANBUL, Oct 9 (Reuters) - A Turkish court has ruled in favour of Turkey's largest media company, Dogan Yayin (DYHOL.IS), in its challenge to a demand for 915 million lira
($625 million) in collateral for a tax fine, the company said on Friday.
Dogan said it expected the ruling on this demand, dating from early in 2009, to set a precedent for a more recent demand for collateral over a seperate record 4.8 billion lira ($3.3 billion) tax fine, which has raised concerns about Turkey's commitment to press freedom.
Shares in Dogan companies surged on news of the ruling by Turkey's top administrative court, the Council of State.
"The Council of State...has ruled in favour of our company on suspending the execution (of the collateral demand)," Dogan Yayin said in a statement. It did not give details on the justification for the ruling.
"The tax administration is expected to act in line with this decision of the Council of State on the other collateral demand to our company," it said.
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 AK Party government. The government has accused Dogan newspapers and television channels of acting like an opposition party. There are concerns the fines could cripple the company.
The 915 million lira collateral demand is linked to a tax penalty imposed over alleged irregularities during Dogan Yayin's sale of a 25 percent stake to German publisher Axel Springer (SPRGn.DE) for 375 million euros ($475 million) in 2006.
Shares in Dogan Yayin rose 8.9 percent to 1.10 lira by 0745 GMT. Its parent, Dogan Holding, controlled by billionaire Aydin Dogan, jumped 9.1 percent to 1.08 lira.
Friday was the last day for Dogan Yayin to provide collateral for the more recent 4.8 billion lira fine, which applies to alleged tax irregularities at its publishing units between 2005 and 2007.
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 Dogan Holding.
The European Commission has said the latest fine threatened press freedom in Turkey and could damage its bid to become the first Muslim member of the EU. The Commission is expected to criticise the government for its handling of the tax row in a progress report next week.
Dogan owns top-selling daily Hurriyet (HURGZ.IS) and is co-owner, with Time Warner, of the broadcaster CNN Turk.
($1=1.4640 lira)
(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/
(C) Reuters 2009. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nL9712240
- Tweet this
- Link this
- Share this
- Digg this
- Reprints
Follow Reuters