Motorola, Nokia Closer to Recovering Missing $3.4 Billion from Uzan Family
Motorola and Nokia are reported to have found the hiding place for some of the missing US$3.4 billion that was awarded to them in a long running lawsuit against the Turkish Uzan family. In a filing with the US court, the two companies claim that Cypriot shell company Libananco Holdings is a front for the Uzans.
Libananco Holdings itself has a US$10 billion lawsuit against the Turkish government over the seizure of two Uzan electricity companies. The lawsuit is pending before World Bank arbitrators based in Washington DC, USA.
Motorola and Nokia say Libananco's sole shareholder is a long-serving Uzan ally indicted in Turkey for trying to smuggle an antique gun into Jordan. They say the man has conceded he's an agent for the Uzans and that Turkey has argued that Libananco is "a shell entity owned and controlled by the Uzans."
According to a report by Bloomberg News, Motorola and Nokia are asking a U.S. judge to seize Libananco's claim against Turkey in that case
U.S. District Judge Jed Rakoff, who is presiding over the New York lawsuit, has scheduled a hearing for Nov. 19th to hear the two phone company's arguments.
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 US$1 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 US$2 billion that was owed to the companies.
In that ruling, Judge Rakoff stated that the evidence presented at trial proved that the members of the Uzan family "have perpetrated a huge fraud." Specifically, Judge Rakoff ruled that "[u]nder 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 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 US$6 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 US$4.55 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.
It was also reported by Todays Zaman that Cem Uzan has requested asylum in France after he left Turkey in early October following conviction for fraud. He is currently appealing the court ruling.
source
Libananco Holdings itself has a US$10 billion lawsuit against the Turkish government over the seizure of two Uzan electricity companies. The lawsuit is pending before World Bank arbitrators based in Washington DC, USA.
Motorola and Nokia say Libananco's sole shareholder is a long-serving Uzan ally indicted in Turkey for trying to smuggle an antique gun into Jordan. They say the man has conceded he's an agent for the Uzans and that Turkey has argued that Libananco is "a shell entity owned and controlled by the Uzans."
According to a report by Bloomberg News, Motorola and Nokia are asking a U.S. judge to seize Libananco's claim against Turkey in that case
U.S. District Judge Jed Rakoff, who is presiding over the New York lawsuit, has scheduled a hearing for Nov. 19th to hear the two phone company's arguments.
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 US$1 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 US$2 billion that was owed to the companies.
In that ruling, Judge Rakoff stated that the evidence presented at trial proved that the members of the Uzan family "have perpetrated a huge fraud." Specifically, Judge Rakoff ruled that "[u]nder 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 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 US$6 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 US$4.55 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.
It was also reported by Todays Zaman that Cem Uzan has requested asylum in France after he left Turkey in early October following conviction for fraud. He is currently appealing the court ruling.
source
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