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April 25, 2008, Friday

Cartel ill at ease

The structure of the Turkish media has always been a focal point in this country. There isn't anybody who doesn't know what sort of functions the media fulfill and in whose hands they are; how it tries to manipulate society and with what sorts of dirty connections; and how its transforms tactics of psychological warfare into its tools by calling white black and black white.I will not provide a list here, but I should not fail to note that the only way to reduce the influence of these dirty connections is to step up the competition in the media and promote diversity. But whenever a step is taken in this country to diversify the media, the same play is staged and always by the same group.

When one speaks of the media in Turkey, the first group to come to mind is the Doğan Media Group with its many newspapers, magazines, and television and radio stations. This group isn't only interested in media activities; it operates in a number of different sectors such as communications and energy. The holding in question is one of the greatest in Turkey, because its owner has the distinction of being the single highest taxpayer in Turkey; we should accept him as one of the richest people in the country. The Turkish public has witnessed on so many occasions that there is basically nothing this group won't do to protect its own commercial interests and the political interests of the segments of society it is in touch with through the extensive media power it possesses.

This is a group that it has the temerity to wage war on governments for the sake of the interests of the companies it owns; it is able to form and overthrow governments (as past examples may well suggest). So much so that it may beat the war drums against another country for its own interests and point out targets with the fearlessness of a commander in chief. (Please refer to the publishing policy of this group's media organs before the Iraq war and its belligerent tone prior to the Turkish Armed Forces' [TSK] northern Iraq operation.)

Before the Iraq war, which began in 2003, this group waged a strong campaign that Turkey be allowed to enter Iraq with the United States and that more than 80,000 American troops be permitted to invade Iraq through Turkey. It turned out they had made a deal with US officials with the thought that "Turkey will eventually have to give this permission to US troops" and according to the deal, it was going to meet all the US troops' fuel needs through POAŞ, the group's oil company. Therefore, when the US Army was not given the green light with the motion on March 1, 2003, the Doğan Group was probably even more disturbed and angered than the US administration was. This group still hasn't forgotten the pain of this motion, which prevented it from adding hundreds of millions more dollars to its coffers.

So it shouldn't be difficult for you to conclude that this group, ready to risk anything to remain the dominant power in the sector, is not afraid of engaging in any type of war in the media, which it has dominated through the revenue it earns from ads and commercials, subscriptions and television ratings. The Doğan Media Group, which has started exhibiting all the features of a classic cartel in becoming an enormous media conglomerate, has always hated a competitive atmosphere and has engaged in all manner of acts to undercut the media companies or groups it deems to be rivals. Is there anybody who doesn't know that the Doğan Group has repeatedly waged fatal wars on groups owned by Dinç Bilgin, Turgay Ciner, Mehmet Emin Karamehmet and the Uzan family? It does its utmost to strangle all sorts of rival initiatives at birth and to publicly denigrate any sort of media formation. It labels some newspapers as radical/fundamentalist and spreads the lie that some papers, like Zaman, which it distributes in return for a certain payment, are distributed free of charge. And it sees no problem in continuing to perpetrate this vileness despite the reports of international independent auditing companies.

Recently the war drums have been beating again in this group, which is so adept at publishing twisted truths, colored news stories and fabricated case reports and launching all sorts of denigrating campaigns. The reason for the latest flurry of activity is the Çalık Group, which has entered the press sector by paying $1.1 billion to buy the Sabah Group, which had first been sold for $300 million and was later taken under state control again because of infractions discovered. This sale, whose payment was made on time, was the chief content in reports in the Doğan Group's newspapers and televisions stations yesterday. What they have started to repeat like a never-ending refrain is that the Çalık Group provided this sum by taking a loan from two public banks and finding a Qatari investment company as a partner. Even though I turn a deaf ear to rumors that the Doğan Group terrorized private banks to prevent them from extending any credit to Çalık, I should note how Doğan realized some of its transactions in the past.

The rise of the Doğan Group is a result of the sort of relations it is today accusing Çalık of. Doğan began to carry weight in the media world in the early 1990s. The most important event that expedited this growth process was the 1994 purchase of Dışbank, which was then owned by İş Bank, by Doğan, who was dealing in spare car parts at the time. Doğan coming up with the required sum in the form of a loan from İş Bank upon failing to provide it from its own resources had risen to public notice as a highly controversial event.

The financial situation of Dışbank, which had contributed greatly to Doğan's rapid rise in the media world, deteriorated over time. However the Treasury and the Banking Regulation and Supervision Agency (BDDK), which has seized or taken under supervision all other banks in the same situation, buried themselves in silence when Dışbank was in question. They turned a blind eye to the Doğan Group taking such a large loan from Dışbank, large enough to put its very survival at stake, during its purchase of POAŞ - the Doğan flagship of today -- and this gave the bank a serious financial jolt. (Although Doğan was permitted to take only $66 million from its own bank as a loan under the Banking Law, it used a $198 million loan to be able to realize the purchase of POAŞ.) Rumor has it that Doğan appointed Engin Akçakoca, then BDDK president, and Nebil İlseven, then deputy president of the Savings Deposit Insurance Fund (TMSF), as advisors to the holding as a reward for allowing the violation of loan regulations committed during the purchase.

The Doğan Group, which is now finding fault with the $750 million the public banks provided as a loan for the purchase of ATV-Sabah, used a much larger sum as a loan during the privatization of POAŞ. Aydın Doğan, Doğan Holding board chairman, verified this piece of information at a press conference he held on Oct. 22, 2003: "We paid $500 million of our $1.260 billion debt from our own resources, and the rest from a consortium of banks."

And the appointment of Vural Akışık -- the then-head of banking watchdog BDDK -- who helped the Doğan Group secure credit from public banks -- as the board chairman of POAŞ right after the Doğan Group was extended the necessary credit from Dışbank sparked heated debate.

Since the Doğan Media cartel hates competition, I'm sure this issue will precipitate a barrage of controversy in the coming days. And I will be coming back to this subject from time to time…

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