Transmeta Corporation (NDAQ: TMTA), well known for its patent battle with Intel, may face some scrutiny by its largest shareholder. Riley Investment Management demanded that the company provide records for an investigation of potential mismanagement by the company’s board of directors. Many analysts and shareholders are not surprised by the move, which comes after a litany of other jabs that the activist investor has taken against the company – all justified.

“The purpose of this demand to inspect the Company’s Books and Records is to investigate potential wrongdoing, mismanagement, waste of corporate assets or breaches of fiduciary duties by members of the Company’s Board of Directors and to assess the ability of the Company’s board to impartially consider a demand for action (including, without limitation, a request for permission to file a derivative lawsuit on the Company’s behalf) related to the items described in this demand,” said Riley in a statement.

Riley previously criticized Transmeta for awarding “staggering options grants” to certain executive officers, which would have diluted shareholders by more than five percent. The activist investor also said the company failed to adequately disclose the formula behind a hefty bonus payment awarded to General Counsel John Horsley, related to the company’s $250 million patent settlement with Intel.

Now, Riley has requested that the company provide details on executive compensation along with any business and/or social relationships between the board members and executive officers. Ever since Transmeta has obtained the $250 million Intel settlement, it appears as if things have gotten out of hand and Riley is here to clean up the mess! This is great news for TMTA shareholders who could start actually seeing the proceeds from the $250 million if this activity stops.

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