Turkey demands $3 bln for media group to appeal fine

Tax authorities have demanded Turkey's largest media group Dogan Yayin raise a $3.24 billion guarantee in 15 days to appeal a fine.

Turkey demands $3 bln for media group to appeal fine

Tax authorities have demanded Turkey's largest media group Dogan Yayin raise a $3.24 billion guarantee in 15 days to appeal a fine.

Dogan Yayin was fined to pay a record $2.5 billion for unpaid taxes.

Prime Minister Tayyip Erdogan's government denies this.

"The Tax Office has requested a guarantee of a total of 4.823 billion lira to be shown within 15 days as a combination of the original tax, the tax fine and current calculated interest," Dogan Yayin said in a statement.

Government officials were not available to comment.

Dogan Yayin was hit with a separate $500 million fine in February. The company struggled then to raise enough collateral.

Earlier, TUSIAD, an association of Turkey's main companies and whose current president is a daughter of Aydin Dogan, accused the Finance Ministry of bowing to political pressure.

The AK Party government, in power since 2002, has stepped up tax inspections as it tackles a vast unregistered economy.

Dogan Yayin and the Finance Ministry had been set to meet on Wednesday to discuss the tax fine, but the company said it would now wait for written notice of the fines before deciding whether to hold talks on a settlement or seek legal action.

If the company is forced to raise cash it may have to sell its lucrative stake in fuel retailer Petrol Ofisi, one analyst said. The stake is seen worth around $1.2 billion.

Dogan's Petrol Ofisi stake had long been eyed for possible sale to Austrian partner OMV.

Dogan Yayin said it would use all legal means to appeal the tax office's demand.

In recent years the business landscape has seen a marked change in Turkey with the emergence of a powerful conservative, pro-AK Party elite that has challenged the status quo held by a secular business elite, represented by a number of families, such as Koc, Sabanci and Dogan.

Reuters
Last Mod: 26 Eylül 2009, 18:49
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