Motient Corporation Announces Results of Internal Investigation; Audit Committee Concludes that Board Member's Allegations are Without Merit.
LINCOLNSHIRE, Ill. -- Motient Corporation (OTC:MNCP) today announced that the audit committee of its board of directors, assisted by its independent special counsel, has concluded an internal investigation that it began in July 2005 to investigate the validity of allegations made by investor and board member James D. Dondero concerning certain members of the company's current and former board, certain members of management, and certain consultants and advisors, and has found the allegations to be completely baseless, unsubstantiated, and without merit.
Motient's board instructed the audit committee to commence its investigation after the committee, in June 2005, received a letter from Mr. Dondero setting forth his allegations. The board gave the audit committee full freedom and authority to conduct an objective, comprehensive review of all of Mr. Dondero's allegations, and also requested that Mr. Dondero provide the audit committee with any evidence he had substantiating those allegations. Despite the board's repeated requests, and Mr. Dondero's repeated promises to do so, Mr. Dondero failed to produce any material evidence. Nevertheless, the committee proceeded with its inquiry.
As part of this comprehensive inquiry, the audit committee retained independent special counsel, distributed written requests for information, reviewed company documents and other evidence, and conducted multiple interviews. Based on this investigation, the committee concluded that Mr. Dondero's allegations were objectively refutable and without merit, and cleared all of the subjects of Mr. Dondero's allegations of any wrongdoing.
Mr. Dondero's allegations came shortly after the board's decision to restructure its committees to comply with NASDAQ listing requirements regarding disinterested directors. As part of this restructuring effort, the board determined that under NASDAQ rules, Mr. Dondero was not eligible to remain a member of the board's compensation committee. Mr. Dondero objected to this decision and unsuccessfully demanded that he be reinstated to the compensation committee. He then placed telephone calls to several Motient investors, during which he admittedly discussed matters concerning Motient that the board believes may have included his inappropriate disclosure of material, nonpublic information. When the board was apprised of this conduct, it immediately responded by instructing its nominating committee to further investigate Mr. Dondero's conduct. This investigation remains open while the nominating committee awaits Mr. Dondero's response to the nominating committee's long-outstanding and repeated requests for information.
