The reaction from the clan has been swift. "This is a disappointingly predictable extension of the political vendetta being waged by the fundamentalist AKP government," read a statement released to BusinessWeek by Maitland Consultancy, a London pubic relations firm, on behalf of the Uzan family. A political party founded by Kemal's son Cem challenged the AKP in last year's parliamentary elections. The statement continues: "We have not committed any wrongdoing and will continue to use all legal means to stop the Turkish authorities from [their] continued violation of the most fundamental principles of the rule of law."
This isn't the first time the Uzans have been at the center of controversy. The family has a history of conflicts with minority shareholders, business partners, and government regulators. In the mid-1990s, the Templeton Emerging Market Fund filed a complaint with Turkish financial regulators claiming that the Uzans had defrauded it and other minority shareholders in a large electric utility -- a charge the Uzans have denied. Also, in early August, Turkish officials annulled the family's winning bid in the privatization of chemicals group Petkim.
But these are mere scuffles compared to the Uzans' face-off with Motorola Inc. and Nokia Corp. over $2.7 billion in loans and equipment to the family-controlled mobile-phone operator, Telsim. The Uzans say that Turkey's 2001 crisis crippled Telsim, leaving it unable to pay back the loans. Nokia and Motorola say they're the victims of organized fraud. On July 31, the U.S. District Court for the Southern District of New York issued a ruling ordering the Uzans to pay $4.26 billion in damages to the two companies, charging the family with "an almost endless series of lies." The Uzans say they will appeal the verdict.
Once, the family could count on its extensive connections within the Turkish political Establishment. Kemal rose to mega-wealth in the 1980s when his close friend Turgut Ozal was Prime Minister. Cem Uzan's bid for political power is unlikely to help the family out: His party failed to capture a single seat in Parliament in November's elections. Looks as if the Uzans' legendary good fortune may be running out. By John Rossant in Paris, with Luisa Edgerly in Istanbul