ISTANBUL (Reuters) - An Istanbul court has agreed to hear a case being brought by the state prosecutor against the chairman of Turkey's biggest listed bank and the founder of its largest media group on charges they ran a fuel-smuggling ring a decade ago, the state-run Anadolu Agency said.
Aydin Dogan, 79, who ran media-to-energy conglomerate Dogan Holding until 2010, and Isbank's Ersin Ozince, 63, face up to 24-1/2 years in prison on charges of setting up a criminal gang, smuggling and fraud, Anadolu said on Wednesday, citing the indictment.
The case covers the 2001-2008 period when Dogan Holding and Isbank owned stakes in Petrol Ofisi, Turkey's biggest chain of gas stations, now operated by Austria's OMV. The retailer is accused of avoiding customs taxes, Anadolu said.
No one was available at the prosecutor's office to comment.
Both companies are seen as part of the secular establishment which dominated the economy until the AK Party, which now-President Tayyip Erdogan founded, swept to power in 2002. Erdogan has frequently clashed with Dogan.
"We are strongly confident the judicial process will prove there is no legal ground for allegations regarding the bank's chairman and managers," Isbank said in a stock exchange filing.
Dogan called the charges "a very ugly slander" in a statement published in its paper Hurriyet. "There is no question of lost or missing payments in the customs taxes and value-added taxes paid for Petrol Ofisi's imports," it said.
The case will serve as "a bellwether of Erdogan's approach to big domestic and foreign business," Tim Ash, strategist at Nomura International, wrote. The first hearing is July 13.
Dogan Holding was slapped with a 3.8 billion lira tax fine in 2009, which it settled. Isbank is part-owned by the main opposition Republican People's Party.
Dogan shares fell 3.6 percent on Wednesday, while Isbank fell 3.8 percent. The main Istanbul stock index was 1.62 percent lower.
Erdogan has repeatedly accused Dogan Holding of bias against the government, which the media organization denies.
In the past month, government authorities seized Zaman newspaper for links with a U.S.-based Islamic cleric wanted by courts for plotting against Erdogan and cut the satellite of channel IMC, accused of backing Kurdish militants.
EU and U.S. officials have said they are worried about the state of Turkish democracy because of restrictions on the media.
The indictment coincides with Dogan's announcement this week it would close Radikal, a news website known for its liberal columnists, for financial reasons.
Ismail Saymaz, an investigative reporter at Radikal, said the site had struggled financially as advertising revenue fell once Dogan scrapped the print edition in 2014.
"That doesn't change the fact the Dogan group has been under intense pressure for the last seven or eight years: tax fines, physical attacks, targeting of personnel, daily criticism from pro-government media," Saymaz said. "We are in a period in which Turkey is being deprived of its different voices, one by one."
Editing by Elaine Hardcastle