Shareholders sue Motorola for concealing Turkish Telsim loan
Motorola shareholders have filed a class action lawsuit against management for the improper disclosure of vendor financing commitments, including over $1.7 billion in vendor financing to Turkey’s Telsim. Targeting former Chief Financial Officer Carl Koenemann, the suit is the fifth of its kind filed since late December.
Motorola announced a $1.5 billion order from Telsim in February 2000, however failed to mention that the deal would be financed with company loans. The complaint alleges that as a result of the company’s decision to assist the Turkish wireless provider, the price of Motorola common stock became artificially inflated causing shareholders to suffer damages.
Since the original announcement of the Telsim order, Motorola stock has fallen 69 percent, losing about $75 billion of its market value, reported Newsweek. Motorola states that it properly disclosed the Telsim financing, insisting that the loan was backed by more than half of Telsim’s stock.
Motorola and Finland's Nokia sued Telsim last January, alleging that the company was not paying back their loans and illegally diverting funds and assets to other enterprises. Telsim denied the charges had any relevance, asserting that it had made great efforts to resolve the dispute but had been rejected by its accusers. In a counter-offensive, Telsim said the Nokia had not fulfilled its obligations under contracts for the sale of equipment. — (menareport.com)
© 2003 Mena Report (www.menareport.com)