Nokia Faces Shareholder Lawsuit Over Windows Phone Deal, Poor Results

 
 
By Michelle Maisto  |  Posted 2012-05-07 Print this article Print
 
 
 
 
 
 
 

Nokia defended itself against unhappy shareholders in a May 3 annual meeting, and may do the same in court, as it faces a class-action complaint accusing it of misleading investors. Nokia has the complaint is "without merit."

Nokia plans to €œdefend itself€ against a class-action complaint filed May 3 by several disgruntled shareholders. The Finnish smartphone maker, which recently watched its 14-year reign as the global leader of mobile phone shipments end, said it is €œreviewing the allegations contained in the complaint and believes that they are without merit.€

The lawsuit was filed in a U.S. District Court for the Southern District of New York by Robert Chmielinski, according to Barron€™s, and claims that Nokia misled investors.

€œDefendants told investors that Nokia€™s conversion to a Windows platform would halt its deteriorating position in the smartphone market. It did not,€ according to the report.

The complaint follows Nokia€™s Annual General Meeting (AGM), held May 3 in the company's hometown of Espoo, Finland. During the gathering, Nokia CEO Stephen Elop and outgoing chairman Jorma Ollila likewise expressed disappointment in Nokia€™s first-quarter performance.

"Like you, we were disappointed with our financial results over the last year and most notably during the first quarter,€ Elop said when he took the stage. €œIt reflects both the transition that Nokia is currently undergoing as well as the increase in competitive pressures within our industry.€

Ollila was CEO of Nokia from 1992 through 2006, years that included its arrival at the top of the market in 1998, and leaves on a low note. A recent survey by broadcaster YLE found 40 percent of analysts rate Ollila€™s 13-year performance as €œpoor€ or €œunacceptable.€

Ollila has also defended his decision to take on a chairman position at Shell Oil while serving at Nokia€”a time some have pointed to as a downward turning point for Nokia€”saying that it€™s common for two such positions to be held at once. By one estimate, the two positions paid Ollila a joint salary of approximately $1.6 million dollars U.S.

€œThe transformation period is truly painful,€ Ollila told shareholders. €œWe cannot be satisfied with our economic performance or that so many Nokia workers have had to leave the company because of the changes.€

Heading into the meeting, Ollila told reporters that Nokia was working on several new devices, including tablets€”a form factor noticeably missing from the Nokia arsenal as it works to defend its slipping market share against Apple and vendors supporting Google€™s Android operating system€”and €œhybrid€ smartphone-tablet devices.

Formally, however, the company has made no such announcements, and it quickly downplayed Ollila€™s comments as €œmisconstrued.€ Nokia spokesperson Keith Nowak additionally told eWEEK by email, €œAs we have been saying, we are watching the space with interest, but have made no announcements regarding a tablet product.€



 
 
 
 
Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.
 
 
 
 
 
 
 

Submit a Comment

Loading Comments...
 
Manage your Newsletters: Login   Register My Newsletters























 
 
 
 
 
 
 
 
 
 
 
Rocket Fuel