ISTANBUL, Turkey (CNN) -- Turkey's Prime Minister Recep Tayyip Erdogan is denying accusations that a record fine levied against the country's largest media conglomerate, Dogan Holding, was politically motivated.
A June 2003 photo shows Dogan Holding owner Aydin Dogan (L) and the premier at a meeting.
1 of 2 "I believe it is not right to mistake the routine works of the state agencies with freedom of press," Erdogan said, according to Turkey's state news agency, Anatolian.
The leader was speaking Monday at a dinner in the Turkish capital attended by European ambassadors.
"I have no right or authority to exert political or economic pressure on press organs, neither do they have the right to assume privileges against the law," Anatolian Agency also quoted Erdogan as saying. Watch a profile on Erdogan »
Last week, the Turkish finance ministry slapped Dogan Holding with a whopping $2.5 billion fine for three years of unpaid taxes. According to its Web site, Dogan Holding's total assets as of June 30th, 2009, amounted to the equivalent of approximately $2.8 billion. Dogan's stock prices plummeted last week on news of the penalty, which economic analysts say may be the highest in Turkish history.
Dogan Holding is a sprawling, Istanbul-based company with interests in oil and gas, manufacturing, agriculture and tourism. It also owns an armada of TV channels, newspapers and publishing companies, in addition to CNN Turk, a joint venture owned by Dogan Holding and Turner Broadcasting International.
Turkish academics, political analysts and journalists argue that over the years, the company's chairman, billionaire industrialist Aydin Dogan, profited from cozy relationships with previous Turkish governments.
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"There was a system of corrupt relations, basically, very much politicized relations between media and politics," said Yasemin Congar, deputy editor-in-chief of the independent newspaper Taraf, and a former reporter for a Dogan newspaper.
"Many media companies, including Dogan Group, became as big as they are thanks to the politicians in the past basically turning a blind-eye to their misdoings. Giving them extraordinary opportunities that were not given to other companies," Congar said.
Executives at Dogan Holding reject these accusations.
"Like any group in Turkey, doing business in Turkey means you have to approach the bureaucracy of the government. But we haven't benefited," said Volkan Vural, a top adviser at Dogan Holding.
Last winter however, a war of words erupted between Dogan and the Turkish prime minister, after Dogan's media outlets reported on an alleged corruption scandal involving top officials in Erdogan's party.
While campaigning in municipal elections, Erdogan called on his supporters to boycott Dogan's newspapers. And last February, the Turkish government fined Dogan Holding half a billion dollars for alleged irregularities arising from the sale of shares to Axel Springer, a German publishing company.
"I do think there is a political aspect to it," said Congar, the Taraf newspaper editor. "I think when Mr. Erdogan sees [Dogan Holding], he sees a political enemy, not a media outlet."
Dogan Holding newspapers and TV channels have slammed the tax fine, accusing the government of trying to destroy critics in the media. "Assault on the Press. Power to tax. Power to destroy," read a headline today on the Dogan-owned, English language Hurriyet Daily news Web site.
"Its cold-blooded murder, nothing else," said Mehmet Ali Birand, anchorman and editor in chief at Kanal D, a Dogan Holding TV station.
The $2.5 billion fine has also raised concerns among media watchdog organizations and the European Union.
"While tax irregularities should indeed be penalized, one can expect the sentence to remain proportional to the alleged offense," European Commission spokesman Amadeu Altafaj Tardio wrote in an e-mail to CNN. "When the sanction is of such magnitude that it threatens the very existence of an entire press group, like in this case, then freedom of the press is at stake."
The media war with Dogan Holding could jeopardize the Turkish government's already troubled bid to become the first predominantly Muslim country to join the European Union. Tardio wrote that "this latest decision" would be taken into account, in a progress report on Turkey's membership negotiations, due to be published on October 14.
David Dadge, director of the Vienna-based International Press Institute, said, "IPI has a genuine concern that the impetus behind the original tax investigation was more motivated by political and personal calculations rather than a genuine desire to carry out a full and fair investigation of the Dogan media group's financial circumstances."
In a statement released Monday, the Turkish finance ministry denied that it was singling out Dogan Holding.
"The Dogan Yayin Group has not been the only group under examination by the Income Controllers. A majority of the media sector has been subject to examination," the finance ministry said in its statement.
Dogan has said it will appeal the fine.