Motorola Takes Action to Seize Assets in $5.26 Billion Lawsuit
Published on: 17th Mar 2014
Note -- this news article is more than a year old.
Motorola has taken a long running lawsuit against the former owners of a Turkish mobile network to the courts in Hong Kong seeking the seizure of their assets.
At stake is a damages claim for USD5.26 billion that was handed down by courts in the USA and UK.
Motorola has now obtained a Hong Kong court injunction to freeze the Hong Kong assets of the Uzan family, who are understood to be in the country. A number of other defendants in the case have also been named as holding assets belonging to the Uzan family.
The original 2003 judgment against the Uzans originated from a series of financing and supply agreements that were entered into beginning April 1998 between affiliates of Motorola and Telsim. Under the agreements, Motorola provided Telsim with equipment financing, financing to purchase a GSM cellular license from the government of Turkey as well as the major supply components for a GSM cellular telephone system. Total financing under the agreements with Telsim, as amended, was approximately $2 billion. As collateral for the loans, the Uzans pledged to Motorola shares of Telsim stock held in another Uzan- controlled company. Motorola noted that Telsim and the Uzans entered into similar financing and supply agreements with Nokia at about the same time, which were not disclosed to Motorola.
Despite repeated assurances by the Uzans that Motorola's collateral was secure and the loans would be repaid, Telsim's last payment to Motorola under the agreements occurred in June 2000. Beginning in late 2000, the Uzans requested to reschedule loan payments and initiated a campaign of fraudulent tactics in an effort to conceal from Motorola the fact that the Uzans had stolen more than USD1 billion from Telsim. Motorola and Nokia jointly filed a complaint in the U.S. Courts against the Uzans in January 2002, seeking to recoup more than USD2 billion that was owed to the companies.
The Uzan family have been fugitives since the Turkish government issued an arrest warrant over their alleged involvement in a bank collapse. At the time, the government spent USD6 billion to bail out the failed Imar Bankasi, and seized the other assets of the family, including Telsim and Star Media Group to recover its costs.
Telsim was sold to Vodafone for USD4.55 billion at the end of 2005, but in line with a prior agreement, only a portion of that was used to settle the legal claims against the Uzan family.