Feeds

Geneva court dismisses Motorola fraud appeal

Tussle with Telsim continues

  • alert
  • submit to reddit

The Power of One Infographic

Motorola has failed in its latest attempt to prove the owners of Telsim guilty of fraud, the Turkish cellular telco said today.

The Geneva Court of Justice ruled that Motorola could not show it had sufficient evidence to back its allegations and consequently chucked the case out.

Motorola had gone to the Court to appeal against an earlier judgement which prevented the cellphone maker from pursuing the Uzan family, Telsim's owners.

Motorola sued the Uzans back in January 2002, as did Nokia. Both companies accused the family of fraud, alleging they had pocketed loans provided by the technology companies in order to allow Telsim, Turkey's second largest mobile phone company, to buy their kit.

Such 'vendor financing' had by then become commonplace in the mobile industry as vendors sought to persuade telcos to buy more handsets and infrastructure hardware. The practice was born in the boom times, as a way to allow rapidly expanding telcos to meet demand for handsets and network capacity, but in more recent, more difficult years vendor financing hit balance sheets hard.

In Telsim's case, Motorola argued that its loan - worth around $2.7 billion - was secured with a promise of Telsim stock. If the telco defaulted, Motorola would take ownership of 66 per cent of the company.

The vendor alleged that the Uzans deliberately took the money and put it onto other family businesses in which Motorola had no stake. One result of the action, it claimed, was that its anticipated stake in Telsim was significantly devalued. Telsim's value has been hit the worldwide telecoms slump too.

"It is, rather, a premeditated and unlawful attempt by the Uzans to rob both Motorola of our assets," the vendor said at the time. It accused the Uzans of extortion, intimidation "and hacking into Motorola's computer system".

Telsim has always denied the charge, and claimed it never repaid the loan because the equipment it received was substandard.

Motorola sued Telsim in the New York court, but the fight has extended to the British court - an attempt by Motorola to get the Uzans extradited from Turkey to the UK, since they refuse to attend the New York court - and, more recently, to Switzerland, where the Uzans have been hoping to take the case to arbitration. Racketeering and organised crime allegations brought against Telsim by Motorola and Nokia were dismissed by the New York court last April.

The Geneva case is simply part of the broader manoeuvring. Telsim CEO Hakan Uzan believes the Court of Justice ruling demonstrates the "futility of Motorola's pursuit of costly and damaging litigation in the US courts", but it's unlikely that Motorola will agree. Or that it's going to see its $2.7 billion any time soon. ®

The Essential Guide to IT Transformation

More from The Register

next story
Yorkshire cops fail to grasp principle behind BT Fon Wi-Fi network
'Prevent people that are passing by to hook up to your network', pleads plod
Major problems beset UK ISP filth filters: But it's OK, nobody uses them
It's almost as though pr0n was actually rather popular
Apple orders huge MOUNTAIN of 80 MILLION 'Air' iPhone 6s
Bigger, harder trouser bulges foretold for fanbois
Google Nest, ARM, Samsung pull out Thread to strangle ZigBee
But there's a flaw in Google's IP-based IoT system
Microsoft unsheathes cheap Android-killer: Behold, the Lumia 530
Say it with us: I'm King of the Landfill-ill-ill-ill
All those new '5G standards'? Here's the science they rely on
Radio professor tells us how wireless will get faster in the real world
US freemium mobile network eyes up Europe
FreedomPop touts 'free' calls, texts and data
'Two-speed internet' storm turns FCC.gov into zero-speed website
Deadline for comments on net neutrality shake-up extended to Friday
prev story

Whitepapers

Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.