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Motorola sues Turkish family in embezzlement case for billions in Hong Kong courts
Turkish family in embezzlement case has many assets in city, according to judge's decision
PUBLISHED : Thursday, 13 March, 2014, 11:43pm
UPDATED : Friday, 14 March, 2014, 4:20pm
Toh Han Shih [email protected]
Motorola sues a Turkish family in a embezzlement case in Hong Kong court. Photo: AFP
A multibillion-dollar lawsuit by US mobile giant Motorola against a fugitive Turkish family has reached Hong Kong courts.
The Uzan family, once among the richest in Turkey, owns companies and millions of dollars of assets in Hong Kong, according to the details of a decision made by Mr Justice Kevin Zervos in the Court of First Instance. Family members have been found guilty in the United States of embezzling money loaned by Motorola.
On November 18, Motorola issued a Hong Kong writ against 12 defendants including the Uzans, seeking US$5.26 billion based on earlier British and US judgments. Three days earlier, Motorola obtained a Hong Kong court injunction to freeze the Hong Kong assets of the Uzan family, which previously owned a mobile phone company, a satellite television station, utilities and banks in Turkey.
The defendants in the Hong Kong court case include Kemal Uzan, his sons Cem Cengiz Uzan and Murat Hakan Uzan, his daughter Aysegul Akay and wife Melahat Uzan. In 2011, a Turkish court issued an arrest warrant for Kemal, Melahat, Murat and Aysegul, according to Turkish reports.
Other defendants include a Hong Kong woman, Phyllis Kwong Ka-yin, Briton Colin Alan Cook, and three Hong Kong companies - HPF Private Investment Fund, AA Capital Investments and Hijaz Investments Hong Kong. Kwong, Cook and the Hong Kong firms held assets for the Uzan family and their associates, Zervos noted.
The Uzans' affairs were investigated by Jules Kroll, founder of corporate espionage agency Kroll, and Gordon Reid Calhoun, of US law firm Fried Frank.
On December 6, Cem Cengiz Uzan said he had lodged a criminal complaint against Kroll, Calhoun, Howard Stahl (another Fried Frank lawyer) and Georgia Vlamis (a Motorola lawyer) for allegedly intercepting HPF's communications. Cem Cengiz Uzan also alleged "his private communications had been illegally intercepted", Zervos noted.
Cem Cengiz Uzan alleged Motorola had violated the rights of HPF as "a corporate citizen of Hong Kong".
In 2009, Cem Cengiz Uzan fled Turkey for France to avoid jail for fraud, embezzlement and other crimes, according to Turkish media reports.
The saga began in 1998, when Motorola lent US$2 billion and Finnish mobile telecommunications giant Nokia lent US$700 million to the Uzans to create a wireless phone company in Turkey. In an earlier judgment, US judge Jed Rakoff found some of the money was embezzled by the Uzans to buy private jets, yachts and luxury property.
On February 18, a Hong Kong judge, Gary Lam Kar-yan, appointed receivers for the three Hong Kong companies.
HPF, with a registered capital of US$10 million, is nominally owned by Kwong and Cook. On March 21, 2012, the registered capital of AA Capital, whose nominal owner is Cook, increased from HK$10,000 to HK$7.8 million. Hijaz Investments Hong Kong, which has a registered capital of HK$10,000, is owned by Al-Hijaz Investments.
Zervos ordered the defendants to declare grounds for contesting Motorola's suit by March 25 and Motorola to respond to the defendants by March 31.
