BlackBerry maker Research in Motion (RIM)
said it is undergoing an executive-level restructuring on the news it will restate $250
million for fiscal year 2004, 2005, 2006 and part of 2007.
Although a special committee found no intentional misconduct by RIM
directors or officers, an internal review pointed to accounting
errors and a process marked by informality and lack of documentation, the company said.
RIM said it will miss the March 3 deadline for filing restated
financial reports with the Securities and Exchange Commission (SEC).
The company will file “as soon as practical” after finishing its
accounting review, RIM said in a statement.
The company said it will split the roles of chairman and CEO; Jim Balsillie resigned as chairman but will remain co-CEO with Michael Lazaridis. The two also gave RIM $5 million to help offset the restatement cost.
Two directors on RIM’s
compensation committee said they won’t stand for re-election. RIM
also moved CFO Dennis Kavelman to COO and expanded the board from seven to nine members.
“We are treating this issue very seriously and have already made
significant progress in rectifying this matter,” Balsillie and
Lazaridis said in a joint statement. RIM was not immediately available
RIM stock reached $136.01 in late morning trading, recouping some of
its early morning losses.
Avi Greengart, analyst with Current Analysis, told internetnews.com that the RIM restatement is irrelevant to the company’s core business — selling handsets to enterprises. But that doesn’t mean there aren’t other things for the company to worry about. “They are under attack from everyone in the mobile device space,” Greengart added.
In January, RIM discounted its new white Pearl BlackBerry, a reaction to greater competition, analysts said at the time.
RIM is not the only company feeling pressure from a tighter telecom market.
Fellow handset maker Motorola
said it would slash 3,500 jobs after miscalculating consumer demand for its newest phones.