Motorola shareholder to take legal action

Posted on 25 Mar 2008 by The Manufacturer

Carl Icahn, Motorola’s second-biggest shareholder, is planning to sue the company to force it to make documents about its struggling mobile phone handset unit accessible.

In January the firm said that it may spin off its handset division, which lost $1.2 billion (£600 million) last year with sales falling by a massive 33 per cent.

“Over the past 12 months the statements and predictions of Motorola’s management and the board about mobile devices business have too often proven to be wrong,” said Icahn. “We demanded these materials for the purposes of enabling us to investigate whether and to what extent the board of directors of Motorola failed in their duties as directors in supervising management and setting policy and direction of Motorola.”

Motorola described the threat of legal action as an “unnecessary distraction”, saying it had offered Icahn access to company information under a confidentiality agreement, but that he had declined the offer.