Motorola awarded $4.26bn

By Matt Whipp

Posted on 1 Aug 2003 at 11:23

Motorola has been awarded more than $4bn in compensation and damages from the owners of Turkey's second largest telco.

US District Judge Jed Rakoff ruled yesterday that the members of the Uzan family had 'perpetrated a huge fraud,' in using funds loaned to the company for their own ends. He said 'under the guise of obtaining financing for a Turkish telecommunications company, the Uzans have siphoned more than a billion dollars of plaintiffs' money into their own pockets and into the coffers of other entities they control.'

The money was spent to fund several lives of luxury and was spent on luxury goods, including private planes, helicopters, yachts and apartments.

The Judge ruled that the monies could be recovered directly from the Uzan family or any of the 130-odd companies owned or controlled by them.

However, Motorola's stock fell 6 cents rather than rose on the prospective windfall, reflecting doubts as to how effectively such an award can be recovered. An earlier ruling that the Uzans should transfer nearly three-quarters of their shares in the Telsim telco to the court had been defied. The Judge gave the family one week to do so and said that if any of them were caught in the US, they would be arrested and held until the order had been complied with.

The ruling also found in favour of Nokia, who had made a similar loan to the Turkish family. 'Today's judgment confirms our belief of wrong-doing against Nokia and proves the activities against us were fraudulent and intentional,' said Olli-Pekka Kallasvuo, Chief Financial Officer of Nokia. 'We will now use this ruling as part of our continued effort of recovering the funds.'