ECONOMY

Monthly Archives: MARCH 2016


Spelling mistake stops hackers stealing $1 billion in Bangladesh bank heist, still get away with $80 million
16.03.16 - Serajul Quadir*
Spelling mistake stops hackers stealing $1 billion in Bangladesh bank heist, still get away with $80 million



A spelling mistake in an online bank transfer instruction helped prevent a nearly $1 billion heist last month involving the Bangladesh central bank and the New York Federal Reserve, banking officials said.
 
Unknown hackers still managed to get away with about $80 million, one of the largest known bank thefts in history.
 
The hackers breached Bangladesh Bank's systems and stole its credentials for payment transfers, two senior officials at the bank said. They then bombarded the Federal Reserve Bank of New York with nearly three dozen requests to move money from the Bangladesh Bank's account there to entities in the Philippines and Sri Lanka, the officials said.
 
Four requests to transfer a total of about $81 million to the Philippines went through, but a fifth, for $20 million, to a Sri Lankan non-profit organization was held up because the hackers misspelled the name of the NGO, Shalika Foundation.
 
Hackers misspelled "foundation” in the NGO's name as "fandation”, prompting a routing bank, Deutsche Bank, to seek clarification from the Bangladesh central bank, which stopped the transaction, one of the officials said.
 
There is no NGO under the name of Shalika Foundation in the list of registered Sri Lankan non-profits. Reuters could not immediately find contact information for the organization.
 
Deutsche Bank declined to comment.
 
At the same time, the unusually large number of payment instructions and the transfer requests to private entities - as opposed to other banks - raised suspicions at the Fed, which also alerted the Bangladeshis, the officials said.
 
The details of how the hacking came to light and was stopped before it did more damage have not been previously reported. Bangladesh Bank has billions of dollars in a current account with the Fed, which it uses for international settlements.
 
The transactions that were stopped totaled $850-$870 million, one of the officials said.
 
Last year, Russian computer security company Kaspersky Lab said a multinational gang of cyber criminals had stolen as much as $1 billion from as many as 100 financial institutions around the world in about two years.
 
Iraqi dictator Saddam Hussein's son Qusay took $1 billion from Iraq's central bank on the orders of his father on the day before coalition forces began bombing the country in 2003, American and Iraqi officials have said. In 2007, guards at the Dar Es Salaam bank in Baghdad made off with $282 million.
 
Bangladesh Bank has said it has recovered some of the money that was stolen, and is working with anti-money laundering authorities in the Philippines to try to recover the rest.
 
A bank spokesman could not be reached for comment late on Thursday.
 
The recovered funds refer to the Sri Lanka transfer, which was stopped, one of the officials said.
 
Initially, the Sri Lankan transaction reached Pan Asia Banking Corp PABC.CM, which went back to Deutsche Bank for more verification because of the unusually large size of the payment, a Pan Asia official said. "The transaction was too large for a country like us,” the official said. "Then (Deutsche) came back and said it was a suspect transaction.” A Pan Asia spokesman could not immediately be reached for comment.
 
The dizzying, global reach of the heist underscores the growing threat of cyber crime and how hackers can find weak links in even the most secure computer networks.
 
More than a month after the attack, Bangladeshi officials are scrambling to trace the money, shore up security and identify weaknesses in their systems. They said there is little hope of ever catching the hackers, and it could take months before the money is recovered, if at all.
 
FireEye Inc's (FEYE.O) Mandiant forensics division is helping investigate the heist, people familiar with the matter told Reuters on Thursday.
 
The sources said Silicon Valley-based FireEye, which has investigated some of the biggest cyber thefts on record, was brought in by World Informatix, a smaller firm that is advising Bangladesh Bank on the investigation.
 
Security experts said the perpetrators had deep knowledge of the Bangladeshi institution's internal workings, likely gained by spying on bank workers.
 
The Bangladesh government, meanwhile, is blaming the Fed for not stopping the transactions earlier. Finance Minister Abul Maal Abdul Muhith told reporters on Tuesday that the country may resort to suing the Fed to recover the money. 
 
"The Fed must take responsibility,” he said.
 
The New York Fed has said its systems were not breached, and it has been working with the Bangladesh central bank since the incident occurred.
 
The hacking of Bangladesh Bank happened sometime between Feb. 4-5, over the Bangladeshi weekend, which falls on a Friday, the officials said. The bank's offices were shut.
 
Initially, the central bank was not sure if its system had been breached, but cyber security experts brought in to investigate found hacker "footprints” that suggested the system had been compromised, the officials said.
 
These experts could also tell that the attack originated from outside Bangladesh, they said, adding the bank is looking into how they got into the system and an internal investigation is ongoing.
 
The bank suspects money sent to the Philippines was further diverted to casinos there, the officials said. 
 
The Philippine Amusement and Gaming Corp, which oversees the gaming industry, said it has launched an investigation. The country's anti-money laundering authority is also working on the case.
 
(Courtesy : *Independent.co.uk)




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Rs. 46000 crore : CAG charges Six Telecom Operators of hiding revenue
12.03.16 - pt team
Rs. 46000 crore : CAG charges Six Telecom Operators of hiding revenue



The Comptroller & Auditor General of India (CAG) alleged that six telecom operators —Bharti Airtel, Vodafone India, Idea Cellular, Reliance Communications, Tata Teleservices and Aircel — had collectively understated gross revenue amounting to Rs 46,045.75 crore between 2006-07 and 2009-10, causing a loss of Rs 12,488.93 crore to the national exchequer reports The Economic Times.
 
The companies rejected the accusation.
This, in turn, has prompted the government to initiate a special audit for three years to FY11, with telecom minister Ravi Shankar Prasad calling it "a legacy issue of the previous government" that he is "trying to clean up".
 
It may be recalled that one of the scandals that led to the defeat of the United Progressive Alliance government stemmed from a report by the national auditor, CAG, into spectrum allotments.
 
"I've taken a serious note of it. Though the CAG report will go to the Public Accounts Committee (PAC), whose recommendations will be final after approval by the House, the telecom department (DoT) will take a special audit for three years (2008-09, 2009-10, 2010-11) to discover if any outstanding dues are required to be paid by telcos," Prasad said.




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Here's why one of the world’s richest men buys his clothes at flea markets
11.03.16 - Peter Holley
Here's why one of the world’s richest men buys his clothes at flea markets



With a net worth of more than $40 billion (Rs. 2,68,000 Crores), Ingvar Kamprad, founder of the furniture chain Ikea, is among the richest people in the world.
 
He is also, it appears, among its most frugal.
 
This week, the eccentric billionaire -- number nine in last year's Bloomberg Billionaire’s List -- revealed in a documentary broadcast this week on Swedish television that he buys his clothes at flea markets to save money, according to Agence France Presse.
 
"I don't think I'm wearing anything that wasn't bought at a flea market," he told Swedish channel TV4, according to business daily Dagens Industri which previewed the film. "It means that I want to set a good example."
 
This is not the first time the 89-year-old has revealed his penchant for extreme penny-pinching. In 2008, he told Swedens Sydsvenskan newspaper that he saves money by getting his hair cut during trips overseas to poorer countries, according to the Telegraph.
 
"Normally, I try to get my haircut when I’m in a developing country," he said. "Last time it was in Vietnam."
 
The website Listverse ranks Kamprad number two on it's list of the "10 most eccentric millionaires and billionaires."
 
Among the reasons for his ranking, the website writes, is that he "reportedly drives a 20-year-old Volvo, recycles tea bags, and steals salt and pepper packets from restaurants."
 
"His home is furnished with IKEA furniture he assembled personally, he uses public transportation, and his modest home would look at home in any suburban neighborhood," Listserve adds.
In the documentary, AFP reported, Kamprad attributed his spending habits to his birthplace.

"It's in the nature of Smaland to be thrifty," he said, referring to Sweden's southern agricultural region where he grew up.
 
But Malcolm Gladwell, in his 2013 book "David and Goliath," argues that Kamprad's unusual spending habits are closely linked to another personality trait that has factored heavily into helping him turn Ikea into one of the world's top brand names.
 
As Gladwell writes:
 
"But crucially, innovators need to be disagreeable ... They are people willing to take social risks — to do things that others might disapprove of."
 
"That is not easy. Society frowns on disagreeableness. As human beings we are hardwired to seek the approval of those around us. Yet a radical and transformative thought goes nowhere without the willingness to challenge convention."
 
Speaking about Kamprad at the World Business Forum in New York in 2014, Gladwell offered the crowd an anecdote to highlight how the businessman's rebellious, uncaring style had benefited him, according to Business Insider.
 
Unable to manufacture his product in Sweden in the late 1950s, Kamprad made the unlikely decision to move his manufacturing operation to Poland. For many in his home country, the move was viewed as unconscionable.
 
"1961. Cold War. Tension," Gladwell said, according to Business Insider. "At the height of hostilities between East and West, he decides to move from Sweden to Poland."
 
"That's like Walmart moving to North Korea," Gladwell added. "People called him a traitor."
 
And yet, Gladwell noted, Kamprad didn't care.
 
Why?
 
"Because he's not the kind of person who cares about what his peers think of him."
 
(Courtesy : The Washington Post)
 

*Peter Holley is a general assignment reporter at The Washington Post. He can be reached at peter.holley@washpost.com.





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Rollback time : Controversial EPF Tax Proposal Withdrawn, Says Government
08.03.16 -
Rollback time : Controversial EPF Tax Proposal Withdrawn, Says Government



Facing all around attack, Finance Minister Arun Jaitley on Tuesday withdrew his Budget proposal to tax employees' provident fund (EPF) at withdrawal.
 
"In view of representations received, the government would like to do a comprehensive review of this proposal and therefore I withdraw the proposal," Jaitley said in a suo motu statement in Lok Sabha.
 
He however stated that 40% exemption given to National Pension Scheme (NPS) subscriber at the time of withdrawal remains.
 
The proposal had come under attack from parties, unions and other stakeholders, stepping up pressure on the Centre.
 
The issue was discussed at a high-level meeting between officials of the Prime Minister's Office (PMO) and the Finance Ministry on 3 March.
 
Jaitley in his Budget for 2016-17 had proposed that 60% of the withdrawal on contribution to employee PF made after April 1 this year will be subject to tax. This would apply to superannuation funds and recognised provident funds including EPF.
 
The proposal would not have impacted 3.26 crore EPFO subscribers drawing statutory wage of upto Rs 15,000 per month. Employees Provident Fund Organisation (EPFO) has a total subscriber base of 3.7 crore.
 
Stepping up pressure on the Centre, Rahul Gandhi had on Saturday said he will continue to fight till it rolls back the proposal for levying tax on EPF withdrawals.




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Pause, Vijay Mallya. Rs 515 Crores Settlement from Diageo is Stopped for now.
07.03.16 -
Pause, Vijay Mallya. Rs 515 Crores Settlement from Diageo is Stopped for now.



A tribunal today temporarily halted a Rs. 515 crores settlement to be paid by spirits giant Diageo to liquor baron Vijay Mallya, after he resigned as chairman of Diageo unit United Spirits. 

The court - the Debt Recovery Tribunal (DRT) - ruled in favour of a group of creditor banks, owed money by Mr Mallya's now-defunct Kingfisher Airlines, and who had argued they had the "first right" to the 515 crores exit payment from Diageo. 
Kingfisher, which stopped flying more than three years ago, had $1.4 billion or 9,400 crores in debts as of September 2013, according to corporate filings from the time. 

Mr Mallya said in a statement on Sunday that he is in talks with a group of 17 banks for a one-time settlement of Kingfisher's debt, adding that he has no plans to run away from his creditors. 

His considerable troubles are expanding quickly - a money-laundering case was filed against him today by the Enforcement Directorate for allegedly sending abroad 900 crores that he borrowed from a bank. 

The tribunal's decision is based on a petition by the State Bank of India or SBI, which is owed Rs 1,600 crores by Kingfisher. SBI has also asked the Karnataka High Court to arrest Mr Mallya, 60, and to suspend his passport. 

In 2012, Mr Mallya sold United Spirits to Britain's Diageo; after months of acrimony, he agreed last month to give up his chairmanship and board position at India's top spirits company.




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