U.S. District Court Issues $4.26 Billion Judgment Against Uzan Family of Turkey for Perpetrating Massive Global Fraud, According to Motorola

Landmark Decision Supports Motorola Claim That Defendants 'Perpetrated a Huge

Fraud'



Motorola to Continue Pursuing All Actions Necessary to Stop Uzans From Further

Perpetrating Global Fraud



Third Parties Risk Contempt Sanctions for Assisting Uzans



Jul 31, 2003, 01:00 ET from Motorola, Inc.

    SCHAUMBURG, Ill., July 31 /PRNewswire-FirstCall/ -- Motorola, Inc.
 (NYSE:   MOT) today announced that the Honorable Jed S. Rakoff of the United
 States District Court, Southern District of New York issued a $4.26 billion
 judgment against the Uzan family of Turkey for perpetrating a massive fraud
 against Motorola.  Further, Judge Rakoff found the defendants in contempt of
 court and ordered that: "unless and until defendants purge their contempts,
 the individual defendants, if found within the jurisdiction of the United
 States, will be immediately arrested and held in confinement until such time
 as they comply with the directives of the Court's" prior orders.
     In today's 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 Court also found that
 the Uzans "have sought to advance and conceal their scheme through an almost
 endless series of lies, threats, and chicanery, including, among much else,
 filing false criminal charges against high level American and Finnish
 executives, grossly diluting and weakening the collateral for the loans, and
 repeatedly disobeying the orders of this Court."
     Cem Uzan has consented to the validity of this judgment by his prior
 concession that the New York court has personal jurisdiction over him, a fact
 referenced by Judge Rakoff.
     The U.S. District Court's ruling ordered the members of the Uzan family
 and the companies they control to pay Motorola $2.13 billion in compensatory
 damages and another $2.13 in punitive damages as a result of the Uzans
 fraudulently inducing Motorola to loan $1.8 billion to Telsim Mobil
 Telekomunikasyon Hizmetleri A.S. ("Telsim"), a telecommunications entity owned
 and controlled by the Uzan family.  The court's ruling also orders that the
 Uzans be arrested and imprisoned if found within the jurisdiction of the
 United States until such time as Uzans purge their prior contempts of court,
 including their defiance of a court order requiring them to deposit 73.5% of
 Telsim's stock into the court's registry.
     Judge Rakoff stated that Motorola is entitled to collect its judgment not
 only directly from the defendants, but also from the assets of any company
 (including 130 companies listed in the Court's opinion) the defendants own
 and/or control, directly or indirectly.
     Christopher B. Galvin, chairman and chief executive officer of Motorola,
 said, "We are extremely pleased with the Court's strong ruling and we look
 forward to recouping the billions of dollars that were diverted by the Uzans
 and returning it to the rightful owners -- Motorola's shareholders.  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."
     "Today's judgment confirms our belief of wrong-doing against Nokia and
 proves the activities against us were fraudulent and intentional," said Olli-
 Pekka Kallasvuo, Chief Financial Officer of Nokia. "We will now use this
 ruling as part of our continued effort of recovering the funds."
     Today's 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 $2.0 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 $1 billion from Telsim.  Motorola and Nokia (NYSE:   NOK)
 jointly filed a complaint in the U.S. Courts against the Uzans in January
 2002, seeking to recoup more than $2 billion that was owed to the companies.
 The court's ruling renders Nokia the equitable owner of 7.5% of Telsim's stock
 as a result of the Uzans' frauds.
 
     Specific Court Findings
     The U.S. District Court found that the Uzans had engaged in numerous acts
 of fraud including, among others:
 
      -- Diversion of Loan Money for Personal Use: The Uzans improperly
 diverted more than $1 billion that was loaned to Telsim to other Uzan-
 controlled companies.  The Uzans used those funds to purchase luxury goods,
 including private planes, helicopters, yachts and apartments.
 
      -- Devaluation of Shares Pledged as Collateral for Loans: The Uzans
 intentionally and effectively reduced in value by two-thirds the collateral
 shares of Telsim stock pledged to Motorola and Nokia at a secret meeting of
 Telsim shareholders held on April 24, 2001
 
      -- Defying Numerous Court Orders: The Uzans repeatedly disobeyed orders
 of the U.S. District Court and Courts of other jurisdictions.  Among other
 things, the Uzans refused to comply with a U.S. District Court-ordered
 preliminary injunction that required the Uzans to transfer the collateral
 shares pledged to Motorola to the Court registry for safekeeping, prohibited
 the Uzans from further devaluing or affecting the collateral shares, and
 prohibited the Uzans from diverting assets from Telsim.  The Uzans, in direct
 contravention of Court orders, also refused to appear for scheduled
 depositions and refused to make a meaningful production of documents.
 
      -- Initiating Illegal Litigation Ploy in Turkey: The Uzans initiated
 collusive injunction actions in Turkey that were designed to thwart the U.S.
 Court action and foreign collection proceedings.  The Turkish Supreme Court of
 Appeal, Turkey's highest court, issued a final decision that the Uzans'
 efforts in the Turkish courts was illegal, lacked proper authority and had no
 legal effect.
 
      -- Filing False Criminal Charges Against Senior Motorola and Nokia
 Executives: The Uzans filed false criminal charges for "armed threat to kill"
 against senior Motorola and Nokia executives in an act of extortion.  In those
 cases which have gone to trial, the charges were dismissed by the Turkish
 criminal court as without basis. Even in the face of these dismissals, the
 Uzans have refused to drop the charges against other executives.
 
     Motorola to Pursue Third Parties Who Assisted Uzans in Perpetrating Fraud
     Motorola said that it is considering pursuing third parties throughout the
 world, including various global financial institutions that directly or
 indirectly hold assets on behalf of the Uzans, who may have assisted the Uzans
 in perpetrating fraud or permitted a breach of Worldwide Freezing Orders
 against the Uzans.  The Worldwide Freezing Orders, first imposed by [a UK
 Court], on January 30, 2002, and later expanded on May 31, 2002, effectively
 froze the worldwide assets of Cem Uzan, Hakan Uzan, Kemal Uzan and Aysegul
 Akay for up to a value of $200 million each.
     Motorola noted that on June 12, 2003 the Court of Appeal of England and
 Wales, one of the UK's highest courts, ruled to preserve up to $800 million of
 the Uzans' assets worldwide.  The UK Court of Appeal dismissed a number of
 appeals brought by Cem Uzan and Aysegul Akay thereby upholding Worldwide
 Freezing Orders against them.  The Court also stayed its decision to discharge
 the Worldwide Freezing Orders against Kemal and Hakan Uzan.  On June 10, 2003,
 the U.S. District Court issued a temporary restraining order against Credit
 Suisse Leasing, Zurich effectively prohibiting it from transferring proceeds
 from the sale, transfer or lease of a $40 million aircraft allegedly
 beneficially owned by the Uzans.
 
     About Motorola
     Motorola, Inc. (NYSE:   MOT) is a global leader in wireless, automotive and
 broadband communications. Sales in 2002 were $27.3 billion. Motorola is a
 global corporate citizen dedicated to ethical business practices and
 pioneering important technologies that make things smarter and life better for
 people, honored traditions that began when the company was founded 75 years
 ago this year. For more information, please visit: www.motorola.com .
 
 

SOURCE Motorola, Inc.

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