Tupras ... taking a hit
Turkey's Tupras faces $69m hit from tax demand and fines
ISTANBUL, January 11, 2015
Turkey's sole oil refiner Tupras said it faces a tax demand and related fines totalling 160 million lira ($69 million) following an 18-month investigation by authorities.
The demand for 65.6 million lira and fines of 94.4 million lira date from 2009 to 2013, the company said in a filing with the stock exchange.
"We plan to utilise all of our legal rights including negotiations," Tupras, owned by Turkey's biggest company Koc Holding, added in the statement.
A Tupras official declined to comment further.
In the past, tax fines levied on companies have been reduced sharply after negotiations.
The tax investigation began in July 2013, when police and finance ministry inspectors raided the offices of Tupras and Aygaz - Turkey's biggest seller of liquefied petroleum gas, also owned by Koc - and checked their physical inventories.
At the time, Finance Minister Mehmet Simsek denied the probe was politically motivated. Some analysts had pointed to criticism of the Koc family, one of Turkey's wealthiest, by President Tayyip Erdogan, then prime minister, for its perceived role in supporting anti-government demonstrations in June 2013.
The family owns five of Turkey's 10 largest companies, and Erdogan expressed anger with the Koc-run Divan Hotel for opening its doors to protesters fleeing police tear gas. The hotel said at the time that it acted humanely and the accusations of backing the protests were unfair.
However, Erdogan - elected president in 2014 - last month attended a ceremony for a $3 billion upgrade of the Tupras refinery, one of Turkey's largest-ever industrial investments, leading to speculation the two sides had made amends.
Tupras has faced official penalties in the past. In 2014, the competition board fined it 412 million lira for abusing its dominant market position in pricing and contracts.
It was also ordered to pay 605 million lira in back taxes and fines in 2010 but negotiated it down to 153 million.
The Koc family is one of the most prominent dynasties among a secular business elite in Turkey that has at times had an uneasy relationship with Erdogan's Islamist-rooted AK Party.
Erdogan's government has in the past levied severe tax fines and seized the assets of media firms perceived to be critical of his administration. The government has denied any political motivation in such cases. -- Reuters
