Turkish Media Tycoon, Bank Chairman Charged in Fuel-Smuggling Case

By Yeliz Candemir 

ISTANBUL--A court in Istanbul has accepted a prosecutor's indictment accusing a Turkish media tycoon and the chairman of Turkey's largest publicly traded bank of involvement in fuel smuggling, the state-run Anadolu news agency said Wednesday.

The indictment charges 47 defendants--including Aydin Dogan, the founder and owner of Dogan Holding AS, a Turkish conglomerate with investments from media to energy, and Ersin Ozince, chairman of Turkiye Is Bankasi AS--with organized fuel smuggling between 2001 and 2008 when their companies were stakeholders in Petrol Ofisi, which is now known as OMV Petrol Ofisi AS, according to Anadolu.

Dogan Holding and Isbank were stakeholders in the Istanbul-based fuel and oil products retailer until the Austrian gas and oil company OMV AG bought the company in 2010.

The prosecutor seeks jail terms of 8 1/2 to 24 1/2 years for Mr. Dogan and Mr. Ozince on the charges of establishing an organization for the purpose of criminal activity and violating the anti-smuggling law, according to Anadolu.

The first hearing in the case is scheduled for July 13.

Dogan Holding, in a statement, said that all the allegations were "baseless" and "slander."

"We are strongly confident that the judicial process will prove that there is no legal ground of allegations regarding the Bank's Chairman and managers, and necessary legal actions will be taken to protect the legal rights of our Bank, the Chairman and managers of our Bank," Isbank said Wednesday in a statement to the stock exchange.

Dogan Holding shares fell 3.6% and Isbank shares were down 3.3% on Wednesday, while Turkey's main BIST-100 stock index closed 1.7% lower.

In 2009, Dogan Holding was fined 4.8 billion Turkish lira ($1.66 billion) on a charge related to tax irregularities. Mr. Dogan at the time said the charge was politically motivated, but the Finance Ministry refuted the allegation.

For most of the AKP's nearly 14 years in power, the party has "been mindful of not crossing certain red lines" that would send a message that it interferes in Turkey's business environment, said Tim Ash, an emerging-markets economist at Nomura in London. "I think this case will be closely monitored in terms of the strength of the case and the fairness of the legal process involved."

Write to Yeliz Candemir at [e-mail]

(END) Dow Jones Newswires

March 23, 2016 14:42 ET (18:42 GMT)

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