Turkish assets mixed, Dogan hit by tax fine woe

* Dogan group shares tumble, hold index back

* Lira, bond firmer

ISTANBUL, Nov 25 - Turkish shares ended flat on Wednesday, held back by steep losses for media giant Dogan Yayin <DYHOL.IS> after it failed to reach a deal with authorities over a record tax fine and resumed its legal challenge to the fine.

The lira firmed against the dollar following a broad fall by the greenback, while bond yields fell. Activity was limited by the prospect of a public holiday from Thursday afternoon until Tuesday.

Dogan Yayin closed 17.2 percent lower at 1.11 lira, extending tax fine-induced losses after German publisher Axel Springer AG <SPRGn.DE> said it suspended a plan to buy a 29 percent stake in Dogan Yayin after the tax talks failed.

Dogan, the country's largest media company, said it would continue with court cases against the 4.8 billion lira ($3.2 billion) tax fine, which has threatened its future.

"The court case will continue for a long time," said Anadolu Yatirim research director Gulizar Ozdemir. "Dogan Yayin shares could fall to 1 lira. It is not clear what will happen. Those who don't want to take risks may sell," Ozdemir said.

Shares in its parent Dogan Holding <DOHOL.IS> fell 11.8 percent to 0.9 lira.

The main index <.XU100> edged up 0.06 percent to 45,538.66 after slight losses on Tuesday and compared with a 0.47 percent rise in the MSCI index of emerging markets <.MSCIEF>.

Top-traded Garanti Bank <GARAN.IS> was unchanged at 5.3 lira, while mining firm Koza Madencilik <KOZAA.IS> was up 0.41 percent at 4.90 lira on expectations that an initial public offering for its gold unit was nearing.

Shares are up some 70 percent since the start of 2009, but have fallen almost 11 percent in the last month, in part on political tension between the ruling Islamist-rooted AK Party and the secular judiciary over illegal wiretapping allegations.

Investors are particularly sensitive to such discord as economic recovery in Turkey has failed to materialise at the pace some had hoped.

The lira <IYIX=> closed at 1.4840 lira against the dollar on the interbank market, firming from a close of 1.4950 lira on Tuesday. The yield on the Aug. 3, 2011, benchmark bond <0#TRTSYSUM=IS> fell slightly to 8.83 percent from the previous day's close of 8.85 percent.

The benchmark bond yield had dropped as low as 7.59 percent in October, but has since risen on expectations the central bank's steep rate-cutting cycle is coming to an end.

Analysts said the Dogan Yayin legal process would continue to weigh on the stock.

"The legal process can take a long time, even years. This means the uncertainty surrounding the issue will continue and be reflected in the stock performance," said analyst Onder Zorba at Ata Invest. (Reporting by Thomas Grove and Ebru Tuncay, editing by Mike Peacock and Toby Chopra) ((daren.butler@reuters.com; +90 212 350 7057; Reuters Messaging: daren.butler.reuters.com@reuters.net))