Research in Motion to restate $250m

BlackBerry maker Research in Motion (RIM) will restate $250 million (€190.9 million) in earnings and co-chief executive Jim Balsillie will step down as chairman after a seven-month investigation into the backdating of stock-options grants.

Mr Balsillie and Mike Lazaridis, the other chief executive, have also agreed to pay Can $5 million (€3.24 million) each to help cover the costs of the inquiry and restatement to the Ontario-based group, the company said yesterday.

Research in Motion is one of the best-known of more than 200 North American companies caught up in the scandal, which involves manipulating grant dates for executives' options to maximise their personal gain.

Federal prosecutors and the US securities and exchange commission have brought fraud charges against almost a dozen individuals and are investigating dozens of other companies.

A special committee of RIM independent directors investigating the options said it found no evidence of "intentional misconduct" in the stock-option programme. It noted Mr Balsillie's explanation that grants were made to attract and retain staff to a fast-growing technology company operating in an intensely competitive environment. "The informality of the option granting process was, in part, a reflection of the stage of development of the company and the rapid growth occurring within the organisation at the time," the report says.

All options granted before February 2002 were accounted for incorrectly, as were two-thirds of the grants between 2002 and last August, when the scandal broke.

The inquiry has delayed RIM's financial statements for the second and third quarter. Nonetheless, the committee expressed full confidence in Mr Balsillie and his senior managers, pointing to a 450-fold increase in RIM's annual revenues since it went public a decade ago.

In addition to splitting the jobs of chairman and chief executive, both held until now by Mr Balsillie, RIM has added two outside directors and named chief financial officer Dennis Kavelman as chief operating officer.

Mr Balsillie and Mr Lazaridis have agreed to put into escrow all RIM shares they acquired by exercising options since the committee began its review.

The committee will decide whether any of the shares should be returned.