Business Blog Posts

Time is running out for BlackBerrys maker, Canadas Research in Motion, to give the Indian government the means to track and read its secure email and instant messaging services that officials fear has the potential to be misused by militants and to create political instability.

BlackBerrys troubles in India, which could cut it out from one of the worlds fastest growing mobile phone markets, are the latest in the firms global headaches as governments worry its encrypted services could be used for activities from terrorism to peddling pornography.

"Deliberations will go on for the next two days and a final decision will be taken on Monday," a senior Interior ministry official told Reuters. A RIM source confirmed the meeting.

"Hopefully they will come up with some solution," the ministry official added.

Last week, India said it will allow BlackBerrys messenger service to continue beyond an August 31 deadline after RIM assured India of manual access to instant messages by September 1, and automated access by November.

But the interior ministry said it will shut down RIMs secure email service if access is not given to its encrypted email data. A shutdown would affect about 1 million users in India out of a total 41 million BlackBerry users worldwide, allowing them to use the devices only for calls and Internet browsing.

RIM uses powerful codes to scramble, or encrypt, email messages as they travel between a BlackBerry device and a computer known as a BlackBerry Enterprise Server BES that is designed to secure those emails.

Indian telecommuncation officials said they had been told by RIM the only way an email could be intercepted is when it temporarily stores itself in a server in a decrypted form before it gets delivered.

"We will discuss all possibilities and see if we can come up with any solution," another Indian government source said.

India is one of a number of countries putting pressure on RIM, which has built the reputation of the BlackBerry, popular with business professionals and politicians, around confidentiality.

Governments such as Saudi Arabias fear it could become a tool to plan militant attacks or for those breaking Islamic laws.

Editing by Krittivas Mukherjee and Miral Fahmy

Fresh from reporting its richest half-year profit in two years, executives at the Anglo-Australian miner will brief BHP investors on four continents on the results, but that is likely to be overshadowed by its bid for Potash.

BHP is likely to focus on wooing Potash shareholders with its current $130 per share offer. Chief Executive Marius Kloppers has sought to discourage expectations he might raise the bid.

Kloppers was expected to spend the coming weeks shuttling between Europe and North America, one source familiar with the situation said. BHP refuses to comment on the movements of Kloppers or other senior executives at the worlds biggest miner.

The chief executive is under huge pressure to clinch his first major deal after three years on the job, and sources who have worked with him on previous deals said he was likely to be at the front-line of any efforts to win over Potash shareholders.

If BHP raised its offer above $158.50 a share, or $47 billion, UK stock market rules would require the company to get approval from its own shareholders because the purchase would exceed 25 percent of BHPs market capitalization.

Some BHP investors have indicated this might not be a problem as the miner was under huge pressure to grow.

"A company the size of BHP has so few options to grow and diversify the business. If they can get this Potash deal people are not going to turn around and say that was a ludicrous bid. We are dealing with a top quality asset," Limestreet Capital portfolio manager Stephen Bartrop said.

POTASH PLANS?

Analysts say Potash Corp could still foil BHP by selling assets into a joint venture at a price that implies a higher value for the whole company than BHP has offered, with Chinas Sinochem as a likely partner.

Sinochem subsidiary Sinofert Holdings could give some clue on its parents intentions when it releases its first-half results in Hong Kong later on Thursday. Sinofert is 22 percent owned by Potash Corp.

The two companies considered big enough to mount rival bids on their own -- Vale and Rio Tinto -- have faded as prospective white knights. Vale pulled itself out of the running, while analysts think Rio has all it can handle after its ill-timed, $38 billion takeover of Canadas Alcan.

Some shareholders worry about risks BHP will assume if it acquires Potash Corp and expands into a new market. BHP aims to tap an expected boom in demand for potash from farmers trying to boost crop yields to feed countries like China and India.

BHPs Sydney-listed shares were trading 0.6 percent weaker at A$37.21 at 0243 GMT on Thursday after the company reported its results late on Wednesday when it revealed a hefty balance sheet and annual cash flow of $17.9 billion.

Investors have pushed Potash shares 13 percent above the $130 bid, betting BHP would eventually boost its offer, or that a rival bidder would emerge. A Reuters survey indicated Potash shareholders would accept $162 a share.

Kloppers has hinted a higher offer would have to wait until BHP received regulatory approvals for its plans, which is expected to take up to two months.

Sources familiar with the matter have indicated they do not expect any major regulatory hurdles.

Editing by Ed Davies and Dean Yates

Japanese policymakers have scrambled to talk down the yen, which rose to a 15-year high against the dollar this week, and have hinted at the possibility of intervening in the markets for the first time since 2004.

"The government apparently is counting on the BOJs further easing to slow the yens rise as it wants to avoid actually intervening in the currency market and causing friction with the United States that wants a weak dollar," said Seiji Adachi, senior economist at Deutsche Securities.

"The BOJ may resignedly ease its policy further in the face of government pressure, but its steps are likely to have short-term impacts."

The BOJ is considering easing monetary policy further at its next rate review on September 6-7 or earlier, with the most likely option an expansion of its cheap fixed-rate loan program for banks put in place in December, sources said.

Prime Minister Naoto Kan is mapping out a series of steps to spur growth, such as extending the deadline for subsidies on purchases of energy-efficient electronics, but the governments options are limited with public debt nearly twice the size of the economy.

That is putting pressure on the BOJ to do its part to help the economy.

Asahi said the government package is expected to be outlined by the end of this month and will stress the need to work increasingly closely with the central bank to deal with rapid rises in the yen that are threatening Japans export-reliant economy.

The package will also call for more action from the central bank, urging it to make its "utmost effort" to beat deflation, according to a draft of the steps cited by the newspaper.

Some analysts say if the yen appreciates rapidly and shoots past 80 to the dollar, the central bank may hold an emergency meeting to decide further easing before the government package comes out.

Additional reporting by Rie Ishiguro; Editing by Edmund Klamann & Kazunori Takada