Following a Canadian pension fund's allegations of conflict of interests in Research In Motion's ( symbol) ongoing internal stock-options investigation, the company said two members of its audit committee have recused themselves. Douglas Wright and Kendall Cork will no longer be a part of the internal investigation into the options grant practices, RIM said late Friday. "In light of the comprehensive nature of the Company's management-initiated, voluntary internal review of stock options, including the past and future role of the Compensation Committee of the Board of Directors in respect of stock option grants, the audit committee believes it is important that the internal review not only be objective in fact, but also be perceived by RIM's stakeholders as being objective," said RIM in a statement. Shares of RIM closed up $2.73 to $141.30. RIM's latest action comes after concerns were raised by the Ironworkers Ontario Pension Fund that RIM's audit committee
might not truly be independent . The pension fund had sent a letter to RIM's audit committee on Oct. 23, had threatened legal action, alleging that directors Douglas Wright; E. Kendall Corkand, Jim Estill, and John Richardson were in a "material relationship" with RIM that could influence their judgment as part of the audit committee investigating the options issue. "All of the members of the audit committee have earned large sums through the exercise of options, which is the very subject of the investigations," Dimitri Lascaris, one of the lawyers representing the pension fund, had said earlier.
Cork, he alleged, earned nearly $2.2 million in option-related compensation in the past six years, while Jim Estill, another audit committee member, exercised options worth more than $1.4 million during the same period. RIM did not respond to those allegations directly but said Friday that its goal of an objective investigation could be hindered "if members of the Audit Committee who are also members of the Compensation Committee are involved in the deliberations relating to the internal review." Wright and Cork, the two members who recused themselves, will, however, continue to be active in all matters relating to the audit committee other than the deliberations relative to the ongoing review, said RIM. Estill and John Richardson, independent members of RIM's board, have not been and are not currently members of the compensation committee, said RIM. The two will continue to supervise the internal review. Earlier, RIM had said its audit committee made a preliminary determination that a restatement of RIM's historical financial statements will be required. The disclosure is part of the bi-weekly updates that the company offers on its affairs because of its ongoing investigation into its historical option grants practice. RIM said it does not currently anticipate a material adjustment to the preliminary second-quarter operating results reported on Sep. 28, the preliminary operating results for the third quarter reported on Dec. 21, or to current or future financial years' operating results as a result of the restatement. The company expects to file its financial statements for the second and third quarters of fiscal 2007 and its restated historical financial statements before fiscal year end of Mar. 3.