NEW YORK (CN) – The Second Circuit upheld a $1 billion punitive damage award against Turkey’s Uzan family for conspiring to swindle billions from Motorola and millions from Nokia to fund a Turkish cell phone operator.
One of the richest families in the world, the Uzans are said to control more than 130 companies, including a large telecommunications firm called Telsim. The Uzans fraudulently obtained loans of $2 billion from Motorola and $800 million from Nokia, purportedly meant to finance Telsim. In exchange, the Uzans gave plaintiffs shares in Telsim as collateral. The Turkish family then “severely diluted the value of the collateral by tripling the number of outstanding Telsim shares and creating a new privileged class of unencumbered shares with the power to elect a majority of Telsim directors,” the ruling states.
This prompted Motorola and Nokia to sue, launching a series of legal proceedings that culminated in an “economic death sentence,” according to the defendants. The circuit found that the $1 billion punitive damage award, reduced from $2.1 billion, is not “grossly excessive.” See ruling.