RIM CEO Thorsten Heins may be confident the decision to delay BlackBerry 10 was sound, but the company’s shareholders may not be so accommodating, with threats of lawsuits over misrepresentation. Under scrutiny is just how much Heins and the rest of the RIM board knew of the potential for delay while still publicly promising it would arrive in late 2012, the NYT reports, with uncertainty over when, exactly, the decision to change the launch timetable was made.
“We’re making good progress [on BlackBerry 10], and I’m committed to sharing the progress with everyone right up until the launch later this year” Heins told developers back in May. That confident statement – and others made both by the CEO and other high-ranking RIM executives – is likely to come under the microscope as lawyers investigate whether there is a case to be answered.
“When you’ve used language like ‘laser focused on coming in on time,’ you’ve really raised expectations” law professor Richard McLaren of the University of Western Ontario told the newspaper, referring to Heins other comments at the developer event. He also highlighted Canadian companies’ legal responsibilities to declare any “major changes in their operations” immediately.
Heins will face shareholders at the RIM annual meeting on Tuesday this week, when he will likely be grilled over the company’s dire last financial quarter. As well as the delay of BlackBerry 10 into early 2013, RIM revealed $518m in losses, not helped by a mere 260,000 in sales of PlayBook tablets. Heins later argued that the company was not in a “death spiral” though it’s unclear how much those assurances will placate investors.
The fear is that RIM will face lawsuits over alleged “knowing and willful misrepresentation” and that Heins and the rest of the executive team will be accused of putting on a brave public face while at the same time knowing internally that BlackBerry 10 would miss its release timescale.
“RIM is well aware of its disclosure obligations under applicable securities laws and is committed to providing a high level of transparency,” the company said in a statement, “as evidenced by RIM’s decision to issue an interim business update on May 29, 2012, to alert shareholders that it expected to report an operating loss.”