Dogan Rises as Erdogan Photo Op Signals Better Relations
Dogan Sirketler Grubu Holding AS (DOHOL), the owner of Turkey’s largest listed media group, jumped after Prime Minister Recep Tayyip Erdogan attended a public event with honorary chairman Aydin Dogan, suggesting relations with the government may be improving.
The shares rose for a third day, adding 4.2 percent to 75 kurus in Istanbul, their biggest gain since April 4.
The company’s stock slumped 14 percent on April 12, when Dogan Chairwoman Begumhan Dogan Faralyali denied reports Aydin Dogan would be arrested amid an investigation into the toppling of Turkey’s government in 1997. Erdogan was photographed with Dogan at the opening ceremony of the Trump Towers Mall yesterday, a joint project between Dogan and Donald Trump, the U.S. real-estate developer and reality-television star who is also the chairman and chief executive officer of Trump Casino Funding Inc.
“Punters may infer from Erdogan’s preparedness to stand beside Aydin Dogan at yesterday’s opening of Trump Tower Istanbul that he is not about to have him arrested anytime soon,” Juliam Rimmer, a broker at CF Global Trading in London, said in a note sent to clients.
The prime minister’s attendance “could be seen as a sign of improving relations between the Dogan group and the government,” Istanbul-based brokerage BGC Partners (BGCP) said. “Dogan shares have been sold off heavily recently with concerns that the recent arrests over the 1997 coup could extend to civilians including the media powers.”
Dogan Yayin Holding AS (DYHOL), the media group in which Dogan Sirketler Holding AS has a 23 percent stake, gained 3.1 percent to 67 kurus today.
Dogan’s companies were hit with a $3.8 billion tax fine in 2009 after Aydin Dogan got into a row with Erdogan over Dogan media’s reporting of a scandal relating to a Turkish charity in Germany that implicated members of the government. Erdogan compared Aydin Dogan to U.S. gangster Al Capone in an interview with the Wall Street Journal in October of 2009.
Dogan Sirketler reported a loss of 757.1 million liras ($419 million) in 2011, compared with a profit of 656.2 million liras in 2010, the company said April 12, missing estimates of a 672.3 million-liras loss as per the average of six analyst estimates compiled by Bloomberg.
The company has 659 million liras left to pay in back taxes and fines from the 2009 bill, chief financial officer Ahmet Toksoy said at a news conference in Istanbul on April 12.
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