Subject: [NEXTEL-1] Uzan family odMotorola Awarded More Than $4 Billion

From: [email-masked]
Date: Thu, 31 Jul 2003 20:45:52 -0400

Motorola Awarded More Than $4 Billion

By Gail Appleson

Thu July 31, 2003
By Gail Appleson
NEW YORK (Reuters)

A U.S. judge on Thursday ordered the family that owns Turkey's No. 2
wireless carrier to pay Motorola more than $4.2 billion for siphoning off
huge sums in a bogus financing scheme.

But Wall Street showed little faith in Motorola's ability to collect the
funds and pushed its battered stock lower.

Motorola Credit Corp., a financial unit of Motorola Inc., the world's
second-largest cellular telephone maker, and its larger rival, Nokia, sued
the Uzan family in Manhattan federal court in January 2002. The two
companies loaned the family about $3 billion for what was to be an expansion
of Telsim, the Turkish wireless carrier.

Instead, the companies accused the Uzans of lining their pockets to buy
luxuries like yachts, planes and expensive Manhattan property.

In his 173-page ruling, U.S. District Judge Jed Rakoff ordered the Uzans to
pay Motorola $4.26 billion plus interest that could accrue after the
judgment. Motorola loaned the Uzans about $2 billion.

Rakoff also referred to an earlier ruling ordering the family to send the
court 73.5 percent of their Telsim shares, which the Uzans pledged as
collateral for the loans. Rakoff held the family in contempt last year for
failing to do so.

The judge said that if the shares were not received within one week of the
current opinion, he would order them to pay Nokia over $853 million.

Rakoff also ordered that the individual Uzan defendants, Kemal, Cem Cengiz,
Murat, Melahat and Aysegul Akay, be arrested if they ever appear in New
York. According to Forbes, Kemal, the family's patriarch, is worth more than
$1.3 billion.

The judge said all the credible evidence before him proved the defendants
"have perpetrated a huge fraud."

"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," Rakoff said.

He wrote that after the Uzans obtained the loans, they hid their scheme
"through an almost endless series of lies, threats and chicanery."

Hakan Uzan, Telsim's chief executive, said in a statement that the family
would appeal the ruling and that the dispute did not belong in U.S. courts.

"In common with most cross-border contracts, the contract between Telsim and
Motorola and Nokia specifically stated that disputes should be heard in
arbitration in Switzerland. Motorola, for its own reasons, decided to
circumvent these conditions of the contract by claiming against the owners
of Telsim in the U.S. courts."

But Motorola and Nokia said the ruling confirmed their accusations of
wrongdoing.

"Today's ruling is a landmark decision concerning the massive global fraud
that has been perpetrated against Motorola by the Uzans, and the latest in a
series of court judgments throughout the world against the Uzans," said
Christopher Galvin, Motorola chairman and chief executive officer.

Both companies said they would try to recoup funds, although it was unclear
how much could be recovered. Steven Davidson, a Washington, D.C. lawyer
representing Motorola, said the companies would go after at least $125
million worth of Uzan assets that have been frozen in the United States,
Britain and elsewhere. He said they would also pursue the family's Swiss
bank accounts, and as well as entities controlled by the Uzans.

Wall Street was not optimistic and Motorola's shares lost 6 cents, closing
at $9.04 on the New York Stock Exchange.

In his ruling, Rakoff said that between April 1998 and September 2000, the
Uzans lied to Motorola and Nokia to get them to transfer about $2.7 billion
to Telsim, supposedly to finance a major expansion of its operations.

But the family intended to divert a large portion of this money to other
entities they controlled and to their own pockets, Rakoff said.

He said the family used the funds to pay for such personal items as private
airplanes, yachts, helicopters and multimillion dollar apartments in New
York and elsewhere.

The judge said that while the family refused to turn over certain
court-ordered documents, it is unclear how much money was diverted. But he
said it amounts to at least $1 billion.

The ruling is the latest blow to the controversial Uzans after regulators in
Turkey took control of two banks and a number of power stations the family
owned on charges of operational irregularities. The Uzans deny any
wrongdoing.

http://story.news.yahoo.com/news?tmpl=story&u=/nm/20030731/tc_nm/telecom_motorola_dc_5

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