Turkey’s Capital Markets Board (SPK) exempted the pro-government Demirören Group from the legal obligation to solicit takeover bids from public shareholders in its purchase of the Hürriyet newspaper, which allowed the group to make a windfall profit of TL 264 million ($44 million) in the transaction, the Cumhuriyet newspaper reported on Saturday.
Under Law No. 6362 on Capital Markets, if a publicly held company changes management or merges with another publicly traded company, the new management is required to solicit takeover bids from smaller shareholders.
The legislation was put into effect in 2015 in order to protect small investors, but it was not applied in the purchase of Hürriyet Gazetecilik by the Demirören Group, the report said, based on a weekly SPK bulletin.
In addition, no written justification was provided for the exemption that was granted to the pro-government group.
Twenty-three percent of the shares of Hürriyet Gazetecilik are publicly held, and the remaining 77 percent was transferred to the Demirören Group. As a result, the entire board of directors was changed.
“The applicable capital markets law is very clear. Under normal circumstances, the company needs to be bankrupt to receive such an exemption. However, that was not the case here. Small shareholders can take legal action against the decision, in which case Demirören is likely to ask them for takeover bids,” an analyst told Cumhuriyet.
Drawing attention to the arbitrariness of the decision, another intermediary firm executive said: “The SPK decided in favor of takeover bids in the purchase of Doğan Gazetecilik, of whose shares only 4 percent are publicly held, whereas it granted an exemption in the purchase of Hürriyet, which is 23 percent publicly held. This situation has no precedent. It’s now unclear if this law will be applied in the future, exacerbating the atmosphere of uncertainty and the erosion of confidence in institutions.”
Meanwhile, economy columnist Uğur Gürses, who had left Hürriyet in mid-July, revealed on Sunday that it was the newspaper’s refusal to publish his column criticizing the SPK decision that led to his parting of the ways with Hürriyet.
“Newspaper management told me that they could not publish the article on the grounds that they were subject to auditing by the SPK. So I stopped writing there. Based on today’s report by Cumhuriyet, we now have an idea about what kind of ‘business’ they had with the SPK,” Gürses said.
The Hürriyet newspaper was part of the Dogan Media Group, which used to be Turkey’s largest media corporation until it was taken over by the pro-government Demirören Group in March of this year.
Turkey is ranked 157th among 180 countries in the 2018 World Press Freedom Index released by Reporters Without Borders (RSF). If Turkey falls two more places, it will make it to the list of countries on the blacklist, which have the poorest record in press freedom.
Turkey is the biggest jailer of journalists in the world. The most recent figures documented by SCF show that 237 journalists and media workers were in jail as of August 15, 2018, most in pretrial detention. Of those in prison 169 were under arrest pending trial while only 68 journalists have been convicted and are serving their time. Detention warrants are outstanding for 145 journalists who are living in exile or remain at large in Turkey.
Detaining tens of thousands of people over alleged links to the Gülen movement, the government also closed down some 200 media outlets, including Kurdish news agencies and newspapers, after a coup attempt in Turkey on July 15, 2016. (SCF with turkishminute.com)