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Doğan Yayın requests settlement in tax fine case
In a written statement released on Thursday through the Public Disclosure Platform (KAP), Doğan Yayın said that its subsidiaries Doğan TV Holding A.Ş., D Yapım Reklamcılık ve Dağıtım A.Ş., Doğan Prodüksiyon Hizmetleri A.Ş., and Alp Görsel İletişim Hizmetleri A.Ş. had requested a settlement over the tax fine levied on them. The move came a day after Doğan Yayın announced that some of its subsidiaries -- on which liens had been placed by the Ministry of Finance after a guarantee raised for the TL 3.76 billion tax fine by Doğan Yayın was rejected by the tax authorities -- had appealed to a court for a stay of execution.
Doğan Yayın said in the statement that if there was no agreement, the court process for the stay of execution would continue from where it was.
Scenarios point to a gloomy future for Doğan Underlining that the fine, larger than the combined market value of Doğan Yayın and Doğan Holding, is a threat to the group’s survival, Reuters stipulated yesterday a number of likely scenarios about Doğan’s future. Scenario 1 - Two sides reach a settlement: Sources close to the company and to the government have said they believe a compromise can be reached. Doğan said on Thursday that four of its units were seeking a settlement with the tax authorities, although it has already opened court cases against the fine and a demand for collateral. Observers say Doğan has already toned down its criticism of the government and the editor-in-chief of leading Doğan daily Milliyet, an outspoken critic of the ruling AK Party, has stepped down -- moves which have fuelled speculation some deal could be in the works. Scenario 2 - Doğan leaves media business: Some observers say billionaire Aydın Doğan, whose holding company has interests in energy, knows he has lost the battle and that the government will not back down. Under this scenario, Doğan would leave the media business and focus on other parts of the holding company. Doğan would sell all or some of its stake in his media units, possibly to foreigners. Doğan units already have foreign partners including Time Warner and Germany’s Axel Springer. The break-up of Doğan’s media empire, which controls half of the country’s private media, would open an opportunity for greater diversity in the sector. Editorial lines in Turkish media traditionally support owners’ other commercial interests and Aydın Doğan has been accused of using his media outlets to advance his various business interest. Scenario 3 - State seizes Doğan units: Although this scenario does not appear likely in the near future, the courts have already imposed an injunction on the bank accounts and some assets of Doğan units. Scenario 4 - Business climate: So far the dispute has not had a negative impact on Turkey’s investment sentiment as foreign investors mostly see the fine as an isolated event stemming from a feud between Erdogan and the group. However, analysts say it has the potential to make investors shy away from spheres in which they might face conflict with the government. İstanbul Reuters |
Doğan Yayın has also been accused of violating the Radio and Television Supreme Council (RTÜK) law in its sale of ownership shares to German publisher Axel Springer in 2006. The RTÜK announced on Tuesday that Doğan Yayın has been given three months to fix irregularities in the ownership structures of institutions within the its media group.
A fine of TL 3.76 billion was levied on Doğan Yayın by the Finance Ministry in early September for evading taxes in a time period covering 2005, 2006 and 2007. Turkey’s tax office demanded on Sept. 24 that Doğan Yayın raise TL 4.8 billion ($3.24 billion) within 15 days as a guarantee for the fine. The guarantee is to cover the fine itself plus interest. The guarantee raised by Doğan on Oct. 9, the final day of the period to granted it, was not approved by the tax authority. The Finance Ministry put a lien on the holding’s companies, and the relevant tax office has sent a notice to those companies. Doğan Yayın announced last week that the bank accounts of some of its companies had been frozen. Doğan Yayın was separately fined $500 million in February for alleged improprieties connected to the sale of shares to Axel Springer.
Hürriyet managers depose before court
Meanwhile another hearing was held in a case filed against Doğan Yayın Holding and its management for tax evasion. Defendants Hürriyet Gazetecilik ve Matbaacılık A.Ş. executive Ahmet Toksoy and Hürriyet Editor-in-Chief Ertuğrul Özkök were present at the hearing, which took place at the Küçükçekmece courthouse. According to an indictment prepared by the Bakırköy Public Prosecutor’s Office in February, Doğan Group owner Aydın Doğan and seven officers -- Özkök, Mehmet Ali Yalçındağ, Soner Gedik, Toksoy, Barbaros Hayrettim Çağa, Vuslat Doğan Sabancı and İmre Barmanbek -- are accused of tax evasion through crimes such as altering accounting records, opening accounts for other people, recording accounts and operations on different documents and recording accounts and operations in places where they did not need to be recorded in order to manipulate tax assessments between April 1, 2003 and March 31, 2004. The defendants face three years in prison if convicted of the charges against them.
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