ECONOMY

Telsim denies fraud

ISTANBUL – Turkey’s second biggest mobile telephone network denied yesterday that it had attempted to defraud Motorola and Nokia, after the two global telecom giants filed a suit against the Turkish firm in a New York court. Motorola and Nokia have accused the Uzan family, which has a controlling stake in Istanbul-based Telsim, of borrowing money to build a next-generation wireless network without paying them back. Motorola is seeking more than $2 billion in damages, while Nokia seeks some $700 million. In a statement printed in the Uzan-owned daily Star yesterday, Telsim said the allegations made by Motorola and Nokia «have no basis, neither in fact nor in law.» «Telsim and its shareholders will vigorously defend their legitimate rights,» the statement said, accusing the US-based Motorola and Finland’s Nokia of «an obvious attempt to ruin our credibility.» Diluted value The suit filed jointly by Motorola and Nokia on Monday in Manhattan’s US District Court claims that Telsim deliberately and illegally diluted the value of stock pledged as collateral for loans worth over $3 billion. It also accuses the Uzan family of extortion and intimidation, and alleges that they shifted assets from Telsim to other companies where Motorola and Nokia did not have a stake. The case represents «a premeditated and unlawful attempt by the Uzans to rob both Motorola and Nokia of our assets,» said Peter Lawson, a lawyer for Motorola. Telsim denied the charges and said it had «made numerous good faith proposals for an amicable resolution of the situation,» which it said had «arisen due to the devastating economic crisis which hit Turkey in early 2001.» That crisis saw the lira lose some 50 percent of its dollar value, crushing many Turkish firms that had taken dollar-denominated loans. In April of last year, two months after the crisis began, Telsim failed to meet a $728-million payment to Motorola, leading the US government to contact Turkish authorities in a bid to help Motorola collect its money. Telsim said it was preparing «appropriate steps aimed at enforcing… legitimate legal rights against both Motorola and Nokia.» It was not clear what steps the Turkish firm would take. Telsim officials were not immediately available for comment.