A local company owes a huge debt to Motorola, and the dispute is threatening to disrupt Turkey's efforts to restore foreign confidence in its economy.
Motorola, the US wireless technology giant, is getting help from the US government and former senior US officials to try to collect a US$2 billion debt from the Turkish company, Telsim, the country's No. 2 cellular phone company. Telsim is owned by a Turkish family whose fortune has been battered by the nation's economic problems.
PHOTO: NY TIMES
The loan helped Telsim buy Motorola products, but Motorola says the Turkish company has been in default since June. Telsim also missed a payment on a US$719 million loan from Nokia, the Finnish technology company.
Marc Grossman, undersecretary of state for political affairs and a former ambassador to Turkey, and the US Embassy in Ankara raised the issue with Turkish government officials, according to a US official.
"They urged the government to make sure everyone meets their contractual obligations and cautioned that the outcome could affect the way foreign investors perceive Turkey," said the official, who spoke on the condition he not be identified.
The official described the contacts as routine. The matter is sensitive, however, because Turkey is a NATO member and ally whose economy has been battered for seven months.
The International Monetary Fund and the World Bank have pledged US$17 billion in emergency loans to Turkey, and the Bush administration has praised its efforts to adopt financial reforms and attract new capital from foreign investors and lenders. The steps are viewed as essential to the country's economic and political stability.
But financial analysts cautioned that Turkey's recovery effort could be damaged if the Turkish government appears unable to protect foreign investors like Motorola and Nokia in a private commercial disagreement.
Along with getting administration help, Motorola enlisted two former senior officials and a prominent investigative agency, people involved in the business dispute said.
One of the former officials was identified as Brent Scowcroft, national security adviser in the first Bush administration. Scowcroft, a consultant in Washington who has worked for Motorola in the past, is chairman of the American-Turkish Council, an influential business group.
The other is Mark Parris, US ambassador to Turkey until last September, when he joined a Washington law firm. Parris is in Turkey now to discuss the matter with business and government officials, the people involved said.
Kroll Associates, an investigative agency based in New York City, was hired to look into the assets of the Uzan family, which owns privately held Telsim and about 100 other businesses.
Attempts to reach Telsim officials and Uzan family members were unsuccessful. A spokesman for Motorola said the company was pursuing all of its options in trying to collect the loan, but declined to discuss specifics.
The Turkish government has not discussed the dispute officially. A senior official said the government was concerned about potential fallout among foreign investors and it hopes that Telsim will begin making payments.
Telsim paid the government US$500 million for the cellular phone license in 1998. Motorola and Nokia lent money to Telsim to buy telephone handsets and other equipment from them. The collateral was mainly Telsim shares.
Motorola's problems became public last month when The Financial Times reported that Telsim missed a US$728 million payment in April. Motorola said it had demanded that the entire US$2 billion be repaid and Telsim had refused.
The US company said Telsim also violated its contract by issuing new shares that diluted Motorola's collateral from 66 percent of Telsim to 22 percent.
Nokia stopped supplying equipment to Telsim after it said the company failed to repay US$240 million on a US$719 million loan.
The Uzan family's wealth was estimated at US$1.6 billion by Forbes. magazine earlier this year, though many sectors in which it has interests have been hurt by the economic decline. In addition to Telsim, the family owns banks, media properties and companies in the cement, steel, energy and construction industries.
Kemal Uzan, 66, started the business in the 1950s. His two sons run parts of the empire and have reputations as big spenders, with homes, yachts and aircraft around the world.
One brother, Cem Uzan, paid US$38 million for a 17,000-square-foot duplex apartment on the top two floors of the new Trump World Tower in New York, near the UN. He also owns other properties in New York and a US$10 million house in London.
The other brother, Hakan, lives in a private compound in Istanbul and owns a large ranch. He travels between them by helicopter, associates said.
When private investigators began examining the family's assets this summer, the Uzans filed civil suit in Turkish court. The suit demanded the detention of executives from Motorola and Nokia, claiming that the investigators had caused security problems for the family.
A person close to Motorola said that the tactics were legal and routine and that the suit had not been pursued.
The Uzan family has been in a dispute since 1994 with Turkey's Capital Markets Board, which regulates its financial markets. The board accused the Uzans of transferring assets from two publicly traded electricity generators that they controlled to their other businesses.
The family has denied the charges, which have not been resolved.
LONG FLIGHT: The jets would be flown by US pilots, with Taiwanese copilots in the two-seat F-16D variant to help familiarize them with the aircraft, the source said The US is expected to fly 10 Lockheed Martin F-16C/D Block 70/72 jets to Taiwan over the coming months to fulfill a long-awaited order of 66 aircraft, a defense official said yesterday. Word that the first batch of the jets would be delivered soon was welcome news to Taiwan, which has become concerned about delays in the delivery of US arms amid rising military tensions with China. Speaking on condition of anonymity, the official said the initial tranche of the nation’s F-16s are rolling off assembly lines in the US and would be flown under their own power to Taiwan by way
CHIP WAR: The new restrictions are expected to cut off China’s access to Taiwan’s technologies, materials and equipment essential to building AI semiconductors Taiwan has blacklisted Huawei Technologies Co (華為) and Semiconductor Manufacturing International Corp (SMIC, 中芯), dealing another major blow to the two companies spearheading China’s efforts to develop cutting-edge artificial intelligence (AI) chip technologies. The Ministry of Economic Affairs’ International Trade Administration has included Huawei, SMIC and several of their subsidiaries in an update of its so-called strategic high-tech commodities entity list, the latest version on its Web site showed on Saturday. It did not publicly announce the change. Other entities on the list include organizations such as the Taliban and al-Qaeda, as well as companies in China, Iran and elsewhere. Local companies need
CRITICISM: It is generally accepted that the Straits Forum is a CCP ‘united front’ platform, and anyone attending should maintain Taiwan’s dignity, the council said The Mainland Affairs Council (MAC) yesterday said it deeply regrets that former president Ma Ying-jeou (馬英九) echoed the Chinese Communist Party’s (CCP) “one China” principle and “united front” tactics by telling the Straits Forum that Taiwanese yearn for both sides of the Taiwan Strait to move toward “peace” and “integration.” The 17th annual Straits Forum yesterday opened in Xiamen, China, and while the Chinese Nationalist Party’s (KMT) local government heads were absent for the first time in 17 years, Ma attended the forum as “former KMT chairperson” and met with Chinese People’s Political Consultative Conference Chairman Wang Huning (王滬寧). Wang
CROSS-STRAIT: The MAC said it barred the Chinese officials from attending an event, because they failed to provide guarantees that Taiwan would be treated with respect The Mainland Affairs Council (MAC) on Friday night defended its decision to bar Chinese officials and tourism representatives from attending a tourism event in Taipei next month, citing the unsafe conditions for Taiwanese in China. The Taipei International Summer Travel Expo, organized by the Taiwan Tourism Exchange Association, is to run from July 18 to 21. China’s Taiwan Affairs Office spokeswoman Zhu Fenglian (朱鳳蓮) on Friday said that representatives from China’s travel industry were excluded from the expo. The Democratic Progressive Party government is obstructing cross-strait tourism exchange in a vain attempt to ignore the mainstream support for peaceful development
RSS