ISTANBUL (Hurriyet)—Turkey’s largest media group, Dogan Media Group (DMG), said on Monday the Turkish tax office froze shares in its units, including Hurriyet Gazetecilik.
The so-called cautionary attachment of shares, worth about 2 billion Turkish Liras ($1.3 billion), was put in place against a demand for collateral for tax bills and fines of 914.8 million liras, DMG said in a filing with the Istanbul Stock Exchange late on Dec. 11.
The Finance Ministry has imposed tax fines totaling 5.7 billion liras on DMG this year after the company became embroiled in a political row over its coverage of the government. Ministers say the penalties result from routine audits and are not political. The European Union has warned that the case may hurt press freedom in Turkey.
The government placed the attachment on DMG’s 67 percent stake in Hurriyet, 71 percent of Dogan Gazetecilik, 45 percent of Dogan Burda Dergi Yayincılık and 54 percent of Dogan TV Holding, DMG said in the filing.
DMG also said it has failed to appeal demands by the government for collateral, including real estate. It will continue to seek legal means to cancel the measures, according to the statement.
DMG and Hurriyet shares declined in Istanbul trading, mainly on concerns that the freeze on some shares will stop the group from selling assets. DMG shares closed Monday at 1.25 liras, falling 4.6 percent, while Hurriyet shares declined 4.7 percent to 1.82 liras.
“Investors are reacting violently each time there’s positive or negative news on Doğan,” Bloomberg quoted Metin Esendal, an analyst at Oyak Securities in Istanbul, as saying.
Speaking to Aydin Dogan, the Dogan Holding Chairman, Yavuz Donat, a columnist for daily Sabah, quoted him as “wanting to downsize.” According to Donat, Dogan said he wants to sell off some brands. “Compared to the West, we are not that big of a group,” Dogan said, according to a column published on Monday. “But in Turkey, even this size causes a grudge.”
Declining to name the brands he wishes to sell, Dogan said there are some demands from domestic and international investors, and the group is “in the phase of talking.”
Hurriyet Daily News & Economic Review is a Dogan Media Group publication.