Fed up after months of plummeting share prices, serial investor Carl Icahn has sued Motorola in an attempt to force the company to release documents regarding its struggling mobile phone business.
Icahn believes the company's mobile phone division has "gone from bad to worse" and should be severed from the company and made into an independent company with a new chief executive. He predicts this would increase returns to shareholders, of which he is the company's second largest.
"Now is the time for action, not more indecision," Icahn said. "As we all are painfully aware, over the past 18 months, the market value of Motorola has dropped by over $37 billion (19 billion). More than $17 (8.50) per share of stockholder capital has vanished under the 'guidance' and 'leadership' of the current board."
Icahn has recently increased his stake in the communications company to 145 million shares, which gives him a 6.45 per cent holding, up from last month's five per cent, the Financial Times reported.
As part of his campaign for an independent handset company, Icahn is seeking four seats on the Motorola board of directors. Media reports have claimed Motorola offered Icahn two of the seats, but refused to accept to the board Keith Meister, one of Icahn's nominees and a manager of Icahn Partners.
Icahn is suing to gain access to documents such as meeting minutes regarding the selection of Motorola's executives, as well as information about the future of the handsets division. He will also look into documents about the use of company property, including aircraft, by board members, executives, and their families.
The lawsuit is "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," Icahn said.
