Tax probe at Koç-owned firms drives shares down

ISTANBUL- Hürriyet Daily News

'The Finance Ministry Tax Inspection Board has started undertaking an inventory research, marker audit and tax probe at our company regarding raw fuel material, products and semi-products, markers, mineral oil and other products,' Tüpraş said in a statement. AA photo

Finance inspectors conducted an inspection yesterday at two Koç Holding subsidiaries, oil refinery Tüpraş and gas firm Aygaz, over allegations of manufacturing smuggled fuel. The probe drove the company’s shares down sharply, but the finance minister has ruled out claims that it is related to the Gezi protests.

Officials at the Finance Ministry carried out searches at the Tüpraş facility in the northwestern province of Kocaeli, with 20 police officers and fuel specialists arriving on the morning of July 24, following a court decision.

The ministry said in a written statement that the Tax Inspection Board was conducting probes into some taxpayers based on a court decision.

The statement said audit officials from the Science, Industry and Technology Ministry had also conducted a national market inspection at the Tüpraş facilities and had sent the obtained samples to Turkey’s science watchdog, Tübitak. The samples will be examined over allegations of manufacturing of smuggled fuel, according to reports.

Tüpraş also released a statement on the inspections. “The Finance Ministry Tax Inspection Board has started undertaking an inventory research, marker audit and tax probe at our company regarding raw fuel material, products and semi-products, markers, mineral oil and other products,” Tüpraş said in a statement.

Tüpraş, the majority stake in which is owned by Turkish conglomerate Koç Holding, was named as the largest company of Turkey in the list of the Top 500 Turkish companies for 2012, the Istanbul Chamber of Industry (İSO) announced on July 23.

‘No link with Gezi’

As both Tüpraş and Aygaz are owned by Koç, questions have arisen as to whether the group, which was slammed by the government during the Gezi Park protests, is being targeted politically in the investigations.

The Divan Hotel, located on the Harbiye side of Gezi Park, opened its doors to protesters running from police from the beginning of the protests. Prime Minister Recep Tayyip Erdoğan accused the Divan Hotel, owned by Koç, of sheltering “those who attacked the police” during the Gezi Park protests.

However, Finance Minister Mehmet Şimşek has condemned those linking the raids on Tüpraş and Aygaz with the protests. “The Tax Inspection Board conducts 50,000 tax investigations every year. There is definitely no connection between the Gezi incidents and tax investigations,” he said on July 24 in a Twitter message.

Energy Minister Taner Yıldız also joined Şimşek, describing the inspections as “routine,” speaking today. “The reason behind the inspection is to eliminate a potential concern in the fuel sector,” he said, noting that public institutions were being probed as well.

The shares of Tüpraş, Aygaz and Koç plunged as news of the probe came through. While Tüpraş was hit most with a drop of around 6 percent, Aygaz and Koç saw morning falls of around 3 percent.

Tüpraş’s value, which was 10.8 billion liras before the unveiling of the news, plummeted to 9.9 billion liras in this morning, with a 900 million-lira fall.