Billionaire investor activist Carl Icahn stepped up his battle to win a seat on Motorola Inc's board, telling shareholders in a letter released on Friday that the "passive and reactive" current directors are partly to blame for the company's problems.
Motorola responded that Icahn's background does not qualify him for the post.
Icahn, who controls a 2.9 percent stake in the world's No. 2 cellphone maker, said he had hoped to avoid the distraction of a proxy fight with the company, which is trying to keep him off the board.
"However, I am willing to expend the time, effort and money necessary to seek election through this proxy contest so that all of us will have a shareholder voice on the Motorola board," he said in a letter filed with the Securities and Exchange Commission.
Icahn and his affiliates have recently bought up more than 68 million shares of Motorola stock, currently worth about US$1.2 billion.
He said in January that he bought shares because they were cheap and that he wanted to use a board position to increase the company's debt level and return more cash to investors.
In the letter to shareholders, however, he said the company's struggles must be resolved before anything else happens.
"Clearly our board members' top priority should be to hold management accountable for fixing Motorola's current operational problems -- and if I am elected to the board I will do so," he wrote.
"Until our operational problems are corrected, buybacks and other transactions that might have looked appropriate earlier need to take a back seat. Otherwise I come to Motorola with no preconceived notions," Icahn wrote.
Icahn said that he will reduce his membership on the boards of public companies to less than six if elected at the May 7 annual meeting.
An "engaged" board of directors at Motorola, he said, should have been able to help the company "avoid the missteps that currently plague its business" or at least have identified and addressed the problems earlier.
Motorola's top two board officers, chairman and chief executive Ed Zander and lead director Samuel Scott III, responded in their own letter to shareholders late on Friday. They said that they did not judge Icahn's qualifications earned in industries other than technology to be "additive to the strength to the board" and would not simply add him to avoid a proxy fight.
"Your board's nominees are actively engaged and keenly aware of their duties to stockholders," they wrote.
"Along with management, they continuously review strategies for improving stockholder value and have been proactive in implementing changes where those changes would advance that objective," they added.
Motorola reports first-quarter earnings on Wednesday.
Shares in the company rose US$0.22, or 1.3 percent, to close at US$17.74 on the New York Stock Exchange. They have lost a third of their value in the past six months, reflecting turmoil and mistakes in strategy and pricing involving its handset business.
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