Turkey's Dogan family, owners of one of the country's biggest conglomerates, has won a small victory after a court revoked part of a huge set of tax fines against the media arm of its empire.
Tax inspectors alleged that Dogan Yayin Holding AS had falsified the sale date of a 25% stake in the group's TV unit to Axel Springer AG of Germany. The court has now cancelled a fine worth 772.5 million Turkish lire ($516 million).
However, the court also ruled that an additional 90 million lire of fines, related to Dogan's alleged failure to pay VAT and book other taxable income, were "partially accepted and partially rejected." The group still faces a separate and much larger set of alleged back taxes, penalties and interest amounting to 4.8 billion lire, or about $3.2 billion.
The background to this case has political undertones after one of the group's newspapers accused Prime Minister Recep Tayyip Erdogan of being involved in fraud – a charge he has strenuously denied, countering that it stems from a failed bid by the group to buy valuable land in Istanbul. (Click here to read our coverage of the story)
Last month, chairman and president Aydin Dogan announced a restructuring of the company, which has been viewed as a way to lessen tensions with the government. As part of the restructuring he will become honorary chairman, while daughter Arzuhan Dogan Yalçındag will assume the role of chairperson of the board of directors.
Dogan family members will continue to serve the group, holding chairpersons positions within their respective companies, once they transfer their executive duties to professional CEO's within six months.
Family members will also hold a chair within the Holding Board of Directors, and be collectively responsible for the strategic development, future designs and consolidated performance of the entire group, in addition to their non-executive duties.
This re-structuring process is due to be finalised within the first half of 2010.
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