TheChek News Flow

*IMF CUTS 2014 GLOBAL FORECAST ON SLOWER U.S., CHINA GROWTH

BlackBerry is in talks with rival technology groups about partnerships to compete with the newly forged alliance between Apple and IBM.

John Chen, chief executive, said the Canadian technology group was in early discussions with companies about working together in parts of the enterprise market. He declined to comment on which companies were in discussions.

Shares in BlackBerry fell almost five per cent last week after IBM said it would work with Apple to sell iPhones and iPads loaded with applications for business users. The tie-up was seen by analysts as a direct challenge for customers that use BlackBerry’s enterprise services.

IBM is planning more than 100 apps targeting industries such as retail, healthcare, banking, travel, transportation and telecommunications, with a focus on security and mobile device management.

Mr Chen has also focused BlackBerry on driving enterprise sales in similar areas since joining as chief executive last year, using its market leading security software combined with devices, servers and messaging services.

Mr Chen said that the partnership between Apple and IBM was both good and bad news for BlackBerry. He likened the tie-up to when “two elephants start dancing”, adding that it would be interesting to see how they worked together given both companies “are used to taking charge”.

“The IBM-Apple tie-up validates what is a huge market,” he said. “[But] the bad news is that you are waking up two giants. It’s competition but it’s good competition and we are going to be more nimble. You don’t want to be a strong guy in a market that is not growing.”

Mr Chen said that BlackBerry was in talks about its own partnerships. “I am working on some, and maybe we will collaborate with others. If I focus on security and identity management then we will be a good solid partner in this enterprise world.

“I am not afraid of competing when I know I am more nimble. I never think [that] going alone is the right strategy. But we have a value add that no one else can do.”

Mr Chen said that BlackBerry was out of danger having almost completed its restructuring. BlackBerry will focus on enterprise customers rather than the consumer business for now, said Mr Chen.

Consumer sales of BlackBerry phones for have fallen, with less than 2 per cent market share in many Western markets, according to Kantar, the research group.

Mr Chen said that even forthcoming handsets such as the square-shaped Passport – which is expected to be released in September – were geared towards being used by enterprise customers in core “regulated industries” such as financial services and healthcare.

A UK subsidiary of Alstom – the French industrial champion that accepted €12.35bn for its energy business from General Electric last month – has been charged with corruption by the Serious Fraud Office.

The UK’s main anti-corruption body said in a brief statement on Thursday that it was charging Alstom Network UK with three counts of corruption and three counts of conspiracy to corrupt relating to “large transport projects” in Tunisia, Poland and India. The first hearing in the case will take place in a London magistrates' court on September 9.

The charges are the culmination of a probe that has lasted more than four years, and which was temporarily halted when two former suspects challenged the SFO.

In that judicial review against the SFO, the court heard that the SFO was building a case around Alstom Network UK, which the agency alleged was used as a “cell” to siphon bribes to the company’s agents around the world. The company has countered that while it used the unit to pay its agents, those payments were legitimate and it was a way of centralising and controlling them, people familiar with the situation previously told the Financial Times.

The SFO’s investigation is just one of several around the world that the company is facing, the most pressing of which is by the US Department of Justice, where two individuals have already pleaded guilty.

Indian investigators were alerted by the SFO in February to separate allegations over whether the company paid £3m of bribes to secure a Delhi Metro contract, according to press reports in India.

The fact that the SFO’s charges related to the UK transport business means that GE – which is only buying Alstom’s energy business – would not be liable for any eventual fine if the company is found guilty.

The DoJ, meanwhile, has concentrated on investigating whether Paris headquartered Alstom or its executives had bribed officials in Indonesia to win power contracts.

The UK overhauled its criminal penalties for companies earlier this year, moving more in line with the US, which has fined companies hundreds of millions of dollars for infractions of its Foreign Corrupt Practices Act. Under the new guidelines, corrupt companies can be fined as much as 400 per cent of their alleged illicit profits.

Still, any UK fine levied on the company if it is found guilty of the SFO’s charges would be small by comparison to the US, even under the new penalty regime.

The SFO’s investigation into individuals is still continuing. It interviewed former Alstom employees in Paris in April and last month warned a number of individuals they might face charges.

While some of the individuals held senior management positions at the company, none were board members of Alstom. This is important because in order to prosecute the company under the UK’s old bribery laws, the SFO must be able to show that a “directing mind” at the company ordered any corrupt payments. That is normally limited to board members, chief executives or “superiors” who “speak and act as the company”, according to prosecutors’ guidelines.

The SFO said that it was still considering charges against individuals and declined to comment further.

Alstom said it was aware the SFO had initiated proceedings against Alstom Network UK and said it was “in ongoing communications with the SFO about its investigation and will continue to work with the SFO to seek a fair and appropriate resolution.”

It did not indicate whether it would contest the charges or plead guilty.

The French and US-Italian carmakers have held informal discussions about a merger earlier this year, according to sources familiar with the talks, as both companies consider a range of options to address their shared problems of high costs and patchy emerging market exposure, reports Henry Foy and Arash Massoudi.

Any deal would bring together two of Europe's most venerable automotive houses and carmaking family dynasties in an effort to tackle spiralling investment needs at both groups.

The two companies held talks that were paused by the completion of Dongfeng's investment in PSA, people briefed on the talks said, stressing that the discussions are preliminary in nature and any major movement is expected next year.

They see benefits in combining Fiat and Peugeot's European operations and leveraging Chrysler's US presence, while PSA's Chinese shareholder Dongfeng Motor would provide both greater Asian access and fresh capital, according to four people with knowledge of the talks.

The talks are part of a range of potential options to fix problems at both companies, which this year have their hands full dealing with their own separate restructuring programmes.

Fiat only this year completed its acquisition of Chrysler, with the new Fiat Chrysler Automobiles due to be listed in the Netherlands in August, while PSA completed a tie up with China's Dongfeng in January and is making an Asian push.

"Negotiations have not started yet, but there have been discussions and I believe that 2015 will be a critical year," said one Paris-based banker with knowledge of the talks.

A spokesman for Fiat-Chrysler said that the company was not currently in talks with PSA. "We have discussions with everyone on targeted projects," the spokesman added.

PSA declined to comment.