ZAMAN - Dogan Holding AS, which owns Turkey's biggest media group and has stakes in companies ranging from finance to construction, posted a record fall in its shares yesterday.
Dogan's stocks took the deepest dive in two months in Istanbul trading after Prime Minister Recep Tayyip Erdogan accused its owner of falsely linking him to a financial scandal. While Dogan stocks plummeted, the Istanbul Stock Exchange rallied 3 percent on average along with European and US markets with the good news that a bailout of US home finance giants Fannie Mae and Freddie Mac had stoked a global equity surge.
Dogan fell 5.97 percent, to YTL 1.62, its biggest decline since July 1. Dogan Yayin Holding AS, which owns newspapers and TV stations, fell YKr 6, or 4.02 percent, to YTL 1.95. Analysts see the row as detrimental to Dogan's joint ventures and possible deals with foreign partners as investors are averse to instability and increasing risk. They warn that possible deals need to wait until the dust clears and that investors are likely to shy away from entering into joint ventures with Dodan Holding.
Dogan group of companies has lost YTL 234 million yesterday. In the trading session yesterday companies belonging to the Dogan group topped the list of 10 companies that lost the most value. Milpa, a subsidiary of the Dogan group, lost 7.81 percent while another Dogan subsidiary, Dogan Burda, shed 5.99 percent in value. Hurriyet, Dogan's leading newspaper, lost 3.13 percent, and Dogan Yayyn dropped 5.97 percent. Petrol Ofisi, Dogan's biggest company, posted a 1.61 percent loss in the market. Ditas Dogan's shares fell 2.90 percent and Celik Halat lost 1.66 percent. Dogan Yayin Holding incurred a loss of 5.97 percent and Dogan Holding lost 4.02 percent.
Prime Minister Erdogan accused Aydin Dogan, chairman of Dogan Holding, of using his publications to falsely link the ruling Justice and Development Party (AK Party) with a case involving the misuse of funds collected for charity. Erdogan said Dogan is conducting a campaign against the government after failing to gain the favors it sought, including permission to plan new skyscrapers in Istanbul worth billions of dollars and a license to build an oil refinery.
Opposition leader Deniz Baykal defended Dogan yesterday and described the controversy as an attempt to sweep allegations of corruption under the rug. He also accused the prime minister of being a blackmailer and a violator of freedom of the press. Dogan Media Group CEO Aydin Dogan, who spoke to journalist Mehmet Ali Birand live on Sunday evening on his Kanal D television station, claimed that the prime minister was trying to redirect the public's attention to him and to distract them from current affairs. He reiterated his earlier words that the accusation over the prime minister's involvement in the charity fraud case was brought up by a suspect who had spoken to a prosecutor in Germany -- where the scandal first broke - and that it was recorded in the prosecutor's file and then was mentioned for the first time in Turkey by Republican People's Party (CHP) leader Baykal.
Dogan acknowledged Erdogan's Sunday claim that he had paid a personal visit to the prime minister but denied that the reason for the visit was to pressure the mayor of Ystanbul to change the zoning of a piece of land on which the Dogan-owned Istanbul Hilton Hotel sits.
Erdogan had said on Sunday that newspapers owned by the Dogan Media Group had begun attacking him and his party due to his refusal to accede to Dogan's request. "I did not go for the Hilton," he said, asserting that he did not ask for anything illegal during the meeting. "I told him we had $2.5 billion to invest in this country. `I want a permit from you. I'll build a refinery.' He asked me where the refinery would be built. I told him we had plans to set up one in Ceyhan. He told me, `No, the Calik group wants that place.' I told him, `Let both Calik and me set up a refinery,' but he didn't agree."
Petrol Ofisi AS, Turkey's biggest fuel retailer, which is jointly owned by Dogan and OMV AG, fell YKr 10, or 1.6 percent, to YTL 6.10. Petrol Ofisi has applied to the energy markets regulator to build a $4.5 billion oil refinery in southern Turkey. The Dogan group conglomerate holds more than 50 companies in Turkey, among them the country's biggest oil/gas company, Petrol Ofisi.