We now have a better idea why Motorola (MOT) CFO Paul Liska was fired in February, and why the company lied about his firing on its earnings call.
According to court documents, Liska was trying to act as a whistleblower to the company’s board, warning them that executives within Motorola’s mobile phone division “were, intentionally or recklessly, materially misstating its 2009 forecasts and strategic plan.”
According to court documents summarized by the Wall Street Journal, “in a little over 90 days (beginning in late September), Mobile Devices’ internal forecasts for 2009 radically changed, with projected unit volume down 40 million units (40%), sales down $7 billion (47%), and operating earnings down $625 million (500%).”
Meanwhile, Motorola’s court filings say that Liska is basically full of it. The company says Liska’s role as whistleblower was a “contrived” cover-up to distract people from his allegedly poor performance. The company supposedly started looking for a new CFO in December because Liska “proved himself to be erratic, unprepared, abrasive, divisive — and often simply absent and ‘unavailable’,” according to the WSJ’s summary of the filings.
Via Seeking Alpha: “As it relates to Paul, I do want to say, he did a lot of good work here and helped us get a lot of the heavy lifting done around this separation and preparation for separation which as we talked about remains the commitment to our strategy going forward and he was also very helpful in getting after along with the businesses and the other leaders in the organisation, cost reduction initiatives. That said, I think the business environment’s changed and given the environmental changes, we thought the change was appropriate at this time as well in that position.”
Yet in a SEC filing, Motorola later said Liska was “involuntarily terminated for cause” on Feb. 19. And that he had to pay back his $400,000 signing bonus.
This is not the kind of distraction Motorola needs. Having completely blown its position as one of the world’s top mobile phone makers, it must now radically reinvent itself as soon as possible — or it will go to zero. New co-CEO Sanjay Jha has been betting big behind Google’s mostly unproven Android operating system, which could either be a really good bet or a big mistake. We’ll see later this year when the first of Motorola’s new phones come out.