Author: My Office News

Apple looking to buy cobalt directly from miners

Apple in talks to buy long-term supplies of cobalt directly from miners for the first time, according to people familiar with the matter, seeking to ensure it will have enough of the key battery ingredient amid industry fears of a shortage driven by the electric vehicle boom.

The iPhone maker is one of the world’s largest end users of cobalt for the batteries in its gadgets, but until now it has left the business of buying the metal to the companies that make its batteries.

The talks show that the tech giant is keen to ensure that cobalt supplies for its iPhone and iPad batteries will be sufficient, with the rapid growth in battery demand for electric vehicles threatens to create a shortage of the raw material. About a quarter of global cobalt production is used in smartphones.

Apple is seeking contracts to secure several thousand metric tons of cobalt a year for five years or longer, according to one of the people, declining to be named as the discussions are confidential. Apple’s first discussions on cobalt deals with miners were over a year ago, and it may end up deciding not to go ahead with any deal, another person said.

An Apple spokesman declined to comment. Glencore Plc Chief Executive Officer Ivan Glasenberg late last year named Apple among several companies the miner was talking to about cobalt, without giving further details.

Securing supplies
The move means Apple will find itself in competition with carmakers and battery producers to lock up cobalt supplies. Companies from BMW AG and Volkswagen AG to Samsung SDI Co. are racing to sign multi-year cobalt contracts deals to ensure they have sufficient supplies of the metal to meet ambitious targets for electric vehicle production.

So far no major deals have been announced, although BMW’s head of procurement told Germany daily FAZ in early February that it was close to securing a 10-year supply deal.

Cobalt is an essential ingredient in lithium-ion batteries for smartphones. While smartphones use around eight grams of refined cobalt, the battery for an electric car requires over 1,000 times more. Apple has around 1.3 billion existing devices, while Apple Chief Executive Officer Tim Cook has been bullish about the prospects for electric vehicles.

The price of the metal has more than tripled in the past 18 months to trade at more than $80,000 a metric ton. Two-thirds of supplies come from the Democratic Republic of Congo, where there has never been a peaceful transition of power and child labor is still used in parts of the mining industry.

In recent years Apple has stepped up its engagement with cobalt suppliers after the origin of the metal in its supply chain came under scrutiny from human rights groups. In a report in early 2016, Amnesty International alleged that Apple and Samsung Electronics Co.’s Chinese suppliers were buying cobalt from mines that rely on child labor.

Last year Apple published a list of the companies that supply the cobalt used in its batteries for the first time, and said it would not let cobalt from small-scale mines in Congo into its supply chain until it could verify that the “appropriate protections” were in place.

Source: Bloomberg / MyBroadband

The National Credit Regulator (NCR) will investigate Standard Bank’s new credit card fee, according to a report in the Sunday Times.

The bank has been charging a standalone monthly “card fee” of between R10 and R210 to customers who use its credit cards only, with the fee depending on the type of card the customer uses.

The card fee was implemented at the beginning of 2018 and is charged in addition to the monthly service fee of R40.

According to the NCR, the Credit Act has a closed list of charges a credit provider can levy on customers – and the card fee is not one of them.

The NCR said it would investigate Standard Bank’s card fee and take approporiate action if the fee is found to be illegal.

According to Standard Bank’s pricing guide for 2018, the card fees are as follows:

Gold, Blue, and Access cards – R10.00
Titanium standalone – R25.00
Platinum standalone – R40.00
World Citizen standalone – R210.00

The report follows SA Consumer Satisfaction Index results in 2017 showing that Standard Bank customers are the least satisfied.

Standard Bank did not respond to requests for comment sent by the Sunday Times.

Source: MyBroadband

Takealot guilty of “fake” prices

The Advertising Standards Authority of South Africa (ASA) has found Takealot guilty of selling products at higher prices than what it advertises the goods for.

In a recent sponsored Facebook promotion, Takealot advertised DKNY perfume at R369 – a saving of 62% on the normal price.

When a consumer tried to purchase this product, however, they had to pay over R200 more than the advertised price.

A complaint was lodged with the ASA regarding this practice after Takealot told the client it was “not responsible for advertising appearing on third-party platforms”.

According to the complainant, Takealot told her “its terms and conditions exempt it from liability emanating from its own advertising”.

Takealot responds
Takealot responded to the complaint, stating it is not an ASA member and that the organisation’s rulings are therefore not binding to it.

The online retailer did acknowledge that this was the third complaint of this type brought to the ASA.

It explained there “may be lags in bringing the pricing of third-party advertisers in line with price changes”.

“The product on special had sold out when the complainant claimed the deal, but the advertising had not been changed,” said Takealot.

ASA ruling
The ASA rejected Takealot’s argument that it was not responsible for advertisements from third-party advertisers.

“If Takealot uses third-party advertisers, then it must ensure that checks and balances are in place that such advertisers only display correct information,” said the ASA.

“The reality is that Takealot benefits from the traffic flow to its website and it must take responsibility for the actions of the third-party advertiser.”

The ASA subsequently rejected Takealot’s submission that its advertising is not misleading.

It said consumers are led to believe that advertised products at the discounted rates are available on Takealot, which they are not.

The complaint that Takealot’s advertisement promising a discounted price was misleading was upheld, and it advised the company not to repeat this advertising.

Source: MyBroadband 

Even before being elected as South Africa’s new president, Cyril Ramaphosa was a people person, joining some for walks, and then jogging along Sea Point promenade. He is clearly liked, but for how long will that honeymoon last?

Coming after the extended period of uncertainty in South Africa resulting from Jacob Zuma’s reluctance to resign, Cyril Ramaphosa’s first State of the Nation address restored dignity and decorum to Parliament, and pressed all the right buttons.

He was gracious to all (even giving thanks to Zuma for facilitating what the ANC has termed “the transition”), before launching into the delivery of a peroration which proclaimed the breaking of a new dawn. South Africa’s “moment of hope”, which was to be founded on the legacy of Nelson Mandela, had returned.

Ramaphosa combined extensive tribute to the heroes of the ANC’s liberation Struggle with the gospel of social inclusion according to the holy writ of the Freedom Charter. This was time to move beyond the recent period of discord, disunity and disillusionment.

The speech was delivered with panache and confidence. It had style, declaring to the nation and the world that he, Cyril Ramaphosa, was in charge.

But along with the style, there was the solid substance. The overall impression was that Ramaphosa intends to impose a new coherence and efficiency on government. Although acknowledging the calamity of the dismally low rate of economic growth, he was upbeat about the future, about the reviving fortunes of the commodities market, and the upturn in the markets.

Deservedly, Ramaphosa was to be allowed to enjoy the applause, as opposition members rose to their feet alongside the ANC MPs to give him a standing ovation which went far beyond ceremonial ritual. After the disaster of Zuma, it would seem to have given a massive fillip to South African pride and confidence.

It also gave the opposition parties a problem. With Zuma gone and a credible ANC president in place, they are facing an uphill electoral battle.

The new president committed to ensuring ethical behaviour and leadership, and to a refusal to tolerate the plunder of resources by public employees or theft and exploitation by private businesses. Critically, this would entail a transformation in the way that state-owned enterprises such as the power utility Eskom would be run.

There would be a new beginning at state-owned enterprises. They would no longer be allowed to borrow their way out of their financial difficulties. Competent people would be appointed to their boards, and there would be an appropriate distancing of their strategic role from operational management. And board members would be barred from any involvement in procurement.

This would all be part and parcel of a much wider reconfiguration of government, presumably a code for the reduction in the number of departments and a reduction in the size of ministerial ranks.

Ramaphosa also committed to hands-on government, promising he would be visiting each department over the forthcoming year.

The forging of a social compact between government, business and labour would define the new era. A part of it would come from a new presidential economic advisory council. There would be summits for jobs and investment; convening of a youth working group to promote youth enterprise and employment and a summit for the social sector to forge a new consensus with NGOs and civil society.

This would add up to the construction of a “capable state” to foster much needed economic recovery. There would be concerted efforts to promote and aid small and medium business and revive manufacturing. Stress was laid on the importance of arriving at consensus around a mining charter, a document designed to guide transformation in this industry.

Due reference was made to preparing South Africa to embrace the fourth and fifth industrial revolutions and the encouragement of scientific innovation and new technology. And there was an explicit undertaking from Ramaphosa that he would take personal responsibility to ensure social grants be paid. And “no individual person in government” would be allowed to obstruct social grants delivery, a brutal, albeit indirect, put-down of the minister concerned.

The one aspect of the speech which would have raised eyebrows among the Davos crowd was Ramaphosa’s re-iteration of the ANC government’s commitment to the expropriation of land without compensation as part of radical economic transformation. This highlighted the ANC’s proposed change to the constitution adopted at its recent national conference.

But that commitment was also fudged by linking any expropriation to ensuring agricultural production and food security. Cynics may argue that this was simply a form of words. In the context of Ramaphosa’s general investment seeking demeanour, agricultural capital and international business are unlikely to be unduly alarmed. But if they are wise, they will take it as a warning to come to the party of “social transformation”.

Ramaphosa has played a long game since he was passed over for president in the mid-’90s in favour of Thabo Mbeki. After playing a key role in crafting the constitution, he left politics, made a lot of money by spearheading the first round of black economic empowerment, and then returned to politics to play what must at times have been a mortifying role as deputy president under Zuma.

He suffered a great deal of criticism for being complicit in the Zuma-era corruption because of his silence – silence he would have reckoned was necessary to secure his rise to the top.

Clearly, Ramaphosa is not above criticism. He is no saint. He lives in the shadow of the massacre of miners at Marikana. Only towards the end of the ANC leadership race did he let fly against corruption and state capture.

Yet it could so easily have been so different. What would the mood have been now if Nkosazana Dlamini Zuma had won the ANC leadership?

Few would have been convinced that she would have been able or willing to leave the legacy of the corruption of the Zuma years behind. In contrast, although there is extensive acknowledgement that Ramaphosa will meet considerable opposition from within the ANC patronage machine if he is to realise his ambitions, he has indeed provided hope.

Yet the irony is that we need to pay due deference to David Mabuza, premier of the province of Mpumalanga.

If it had not been for his last moment tactic of throwing his provincial delegates’ votes behind Ramaphosa at the ANC conference to thwart a Dlamini Zuma victory at the ANC national conference, South Africa would be having to face a very different future.

In true ANC style, the irony is that the moment of hope was facilitated by someone who has been portrayed, even from within the party, as a political hoodlum.

By Roger Southall for The Conversation, published on IOL

In November 2017, the government announced additional steps it would take to reduce its budget deficit by R40bn in the 2018–19 financial year, through reducing expenditure by R25bn and increasing revenue by R15bn.

This was in addition to R15bn-worth of additional tax hikes announced in the 2016 national Budget and R31bn in additional spending cuts of R15bn and R16bn announced in the 2016 and 2017 national budgets, respectively.

The latest monthly government budget figures for December 2017 suggest revenues are likely to undershoot the February 2017 estimates by close to R50bn, broadly in line with the government’s estimates outlined in the October 2017 medium-term budget.

The value-added tax (VAT) rate in South Africa was last raised to 14% in 1993 (from 10%) and remains below that of a number of the country’s emerging-market peers. Moreover, South Africa’s narrow tax base makes the case for a rise in VAT over a further increase in personal income-tax rates. The Treasury’s tax statistics suggest about 1.7m taxpayers were responsible for 78% of all personal income tax collected in the 2016–17 financial year. This points to a tax base that is too dependent on a small number of individuals.

Although raising VAT is a more effective way of increasing revenues, it would be a controversial decision ahead of national polls in 2019. In Momentum Investments’ opinion, a number of alternative revenue-raising options to raising VAT exist at this stage (see the table below).

These include allowing for limited compensation for fiscal drag (the government was able to collect R12bn through this avenue in the previous fiscal year); removing the VAT zero-rating on fuel (this could raise up to R18bn but prove contentious, as the taxi industry is a powerful constituency within the ruling party); and raising sin taxes (on alcoholic beverages and tobacco). The government raised R2bn from the latter in the previous fiscal year.

Momentum Investments believes that raising the top marginal tax rate from 45% would hurt already fragile consumer confidence and subdued household spend. Similarly, the company does not expect a hike in the company tax rate (currently at 28%). Previously, the Davis Tax Committee alluded to a large gap between the headline and effective corporate tax rates in South Africa, suggesting a number of loopholes needed to be addressed before considering a hike in the company tax rate.

The government has additionally committed to implementing the health promotion levy (or sugar tax) by April 1 2018, which could raise an additional R2bn. Moreover, wealth taxes have been debated, but SBG Securities estimates this could raise between R5bn and R8bn at most. In its February 2017 Budget, the government highlighted it was refining measures to prevent tax avoidance through the use of trusts, which could boost revenue collection at the margin.

Wealth taxes have been debated, but SBG Securities estimates this could raise between R5bn and R8bn at most
Absa notes the government could consider removing the VAT exemption on municipal property rates to generate higher revenues. The February 2017 Budget showed this exemption amounted to R10.5bn in the 2014–15 financial year.

While previously the Davis Tax Committee acknowledged VAT as a potential source of funding for additional spending needs, such as the National Health Insurance scheme, recent comments made by the current health minister hinted at using medical tax credits as an alternative source of funding. The minister noted that 8.8m people belonged to a medical scheme. This could provide about R20bn in tax credits per year, which would be sufficient to cover the health ministry’s priority programmes (amounting to R69bn over four years).

Also, the Treasury published its Draft Carbon Tax Bill for public comment, open until March 2018. The actual date of the carbon tax has not yet been announced, but the Treasury noted it would be complemented by a package of tax incentives and revenue-recycling measures to minimise the effect on energy-intensive sectors in the first phase (up to 2022). The Treasury also said the effect of the tax in the first phase was designed to be revenue neutral, after taking the complementary measures into account.

Possible revenue measures
Fiscal drag: Intake – R12bn (last year); likelihood: very high probability
Fuel levies or VAT on fuel: Intake – R3.2bn (last year) or R18.2bn; likelihood: high probability
Sin taxes (alcohol and tobacco): Intake – R2bn (last year); likelihood: high probability
Sugar tax: Intake – R2bn; likelihood: bill passed and due for implementation
Wealth tax: Intake – R5bn–R8bn; likelihood: high probability – delays?
Carbon tax: Intake – initially revenue neutral; likelihood: high probability – draft bill out for public comment
Removal of medical aid tax credit: Intake – R20bn or R2bn (above R750,000); likelihood: moderate probability (higher in medium term)
Dividend withholding tax: Intake – R6.8bn (last year); likelihood: moderate probability (increased previously)
Taxing top marginal bracket: Intake – R4.4bn (last year); likelihood: low probability (steep increase previously)
VAT (0.5% increase): Intake – R11.5bn (last year); likelihood: low probability (higher in medium term)
Company tax increase: Intake – ?; likelihood: low probability (negative business sentiment)

(Source: Nedbank, RMBMS, SBG Securities, national Treasury, Momentum Investments)

While the revenue shortfall for the 2017–18 financial year is in large part due to lower growth outcomes, lower tax buoyancy rates (tax revenue growth per unit of gross domestic product growth) exacerbated low revenue outcomes.

Media reports have suggested the hit to institutional credibility at the South African Revenue Service has negatively affected personal and corporate tax morality. The overall tax buoyancy ratio dipped to 1.01 in the 2016–17 financial year, but the Treasury anticipates a recovery to 1.31 in 2018–19 before a decline to 1.1 in 2020–21 (still above the long-term average of 1.08). A further breakdown of the Treasury’s tax buoyancy projections suggest a sharp pick-up in the company tax and VAT buoyancy rates in the medium term.

By Sanisha Packirisamy and Herman van Papendorp for Business Live

South Africa’s largest retailers

As retailers in South Africa look to support the economy through turbulent times, five of the country’s top retailers feature in global professional services firm Deloitte’s ranking of the 250 biggest retail groups in the world. Pre-scandal Steinhoff is the highest on the list, while Shoprite and Spar also feature.

Few sectors offer reliability at the moment in the South African economy. Although the country is the second richest in Africa behind only Nigeria, and is endowed with economically promising demographic trends, the last few years have represented a slump in economic growth, resulting from a severe dip in global oil prices in 2015.

Most sectors of the economy have been struggling since, including the ever-lucrative mining industry, which has suffered from a plummeting of prices and a spike in costs. However, amid this struggle, one sector that appears to be on the mend is the retail sector, which had its own mini-crisis in 2016, but has since recovered strongly with growth of almost 5% annually.

Now, a report from Big Four accounting and advisory firm Deloitte has revealed the primary drivers of growth in the sector. The report, which ranked the 250 biggest retailers in the world, featured five of South Africa’s major retail groups.

Top five retailers in South Africa

The highest-ranking South African retailer on the list was Steinhoff International at 68th on the global list. The firm was founded by Bruno Steinhoff in 1964 in the town of Stellenbosch in South Africa. Today, Steinhoff International operates in 31 countries, and recorded retail revenues of nearly $13.6 billion in 2016. In 2017, the firm went on an expansion drive, acquiring five firms, including Mattress Firm in the US and Poundland in the UK.

However, since Deloitte conducted its research, the firm has been shrouded in scandal, as sustained irregularities were found in the firm’s accounts for the last few years, forcing the resignation of its CEO and causing an 80% collapse in its shares. Steinhoff’s ranking may, therefore, be affected in retrospect.

The largest retailers in South Africa

The second-highest South African retailer on the list was Shoprite at 94th, with operations stretching across 15 countries, and retail revenues of just over $10 billion in 2016. The firm was founded four decades ago in 1979, and has since grown to employ 144,000 people across its international operations. Alongside the Johannesburg stock exchange, Shoprite also has secondary listings on the Namibian as well as the Zambian stock exchanges.

The SPAR Group of South Africa was next on the list, at 156th, operating across 11 countries and closing fiscal 2016 with just over $6 billion in revenues. The group began operations in 1963, when eight wholesalers were handed exclusive rights to the SPAR brand, which they utilised to supply 500 small retailers. The group now works out of six distribution centres and supplies to more than 1000 SPAR stores across South Africa.

In fourth for the South African list, and 156th in the global ranking is Pick n Pay Stores, with seven countries of operation and revenues of nearly $5.5 billion in 2016. Founded in Cape Town in 1967, the firm now employs approximately 50,000 people worldwide, and stretches across the African continent with operations in Botswana, Mozambique, Zambia, Namibia, and others.

Woolworths of South Africa rounded out the South African presence on the list, with operations in 14 countries and revenues just short of $5 billion. The Cape-Town-based retailer, which was founded as early as 1931, has achieved an impressive compounded annual growth rate of 18.9% since 2011.

Global leaders
Meanwhile, the list of leading retailers across the world had some predictable names on it, with Wal-Mart Stores leading by an enormous margin, followed by another US-based retailer, Costco, in second.

Source: Supermarket & Retailer

Increasingly companies are seeing the workplace as a strategic tool for productivity and collaboration by introducing workplace innovations that make offices much more appealing places to work.

Richard Andrews, MD of Inspiration Office, said: “What makes an office environment great is different for every company. But these are six innovations we are seeing in offices around the world and increasingly in South Africa.”

Overlap zones
“A way to encourage spontaneous collaboration among employees is designing space to allow for “overlap zones,” which make it more likely employees will run into each other,” says Andrews.
Research from the University of Michigan showed that when scientists worked in a space where they ran into one another they were more likely to collaborate. The data suggests that creating opportunities for unplanned interactions among employees both inside and outside the organisation actually improves performance.

Samsung built an office that includes large outdoor areas sandwiched between floors that encourages employees to hang out and mingle in shared spaces. Online clothing store Zappos purposefully planned to build a smaller office for their U.S. headquarters to increase the number of probable interactions per hour per acre.

Configurable desks
Said Andrews: “We are seeing greater demand for desks there fit together like puzzle pieces. They can be moved, reworked and reattached as employees see fit. It matches their immediate needs such as working solo for a collaborative project.”

Music rooms
“One way to boost employee productivity at the office is to foster a positive company culture,” Andrews notes.

It’s not prevalent in South Africa yet but overseas music rooms are proving popular, as long they are soundproofed! At LinkedIn’s headquarters in Mountain View, California employees can play in a room that’s stocked with high-end music equipment like drums, guitars, keyboards, AV equipment, microphone stands, and even stage lighting.

The program improves the company’s marketability to potential employees, especially musicians, both as a specific perk and means to demonstrate the company is not like all the others.

A monitor revolution
We could be entering a new age for office monitors in 2018. “The past year has seen many offices upgrade their screens to 32-inch or even bigger screens and the latest models feature almost border-less edges or even a curved display.”
Besides the significant productivity advantages, companies are also beginning to deeply consider how their technology impacts on the look and feel of the workplace.
Monitors and other technology have become more prominent, as more workplaces opt for sit-stand desks, the back of the screen and the cables are more visible. These latest screens create a sleeker, modern look across the workplace, in turn, organisations are also choosing support tools with aesthetic appeal and that hide cables.

A superdesk
Designing an office space around the “open office” concept is one thing. But what about creating a shared desk for your company’s entire staff?
To represent their collaborative approach to work, marketing company the Barbarian Group built a 400 square meter desk that weaves through their office headquarters in New York City, which can sit up to 170 people at once.

“Of course this might note be practical for employees who want to work in a quieter spaces but it does create a fun sense of oneness,” says Andrews.

Plants and greenery
It isn’t too hard to believe that spending time around nature and sunlight and fragrant greenery is good for you. But now, there’s scientific research to back that claim. A 2014 study in Journal of Experimental Psychology by Nieuwenhuis et al showed that adding plants and greenery in an office can help increase employee productivity by 15%.

“Office landscaping helps the workplace become a more enjoyable, comfortable and profitable place to be,” Andrews adds.

For example, Google’s office in Tel Aviv, Israel has an indoor orange grove that turns an otherwise normal, collaborative space into a relaxing area that makes you feel like you’re sitting outside on a park bench.

Social media is part of the modern fabric of interaction, with some reports suggesting that 66% of users spend time checking social media accounts while at work.

Industry tracker Mediakix suggests that popular platforms YouTube and Facebook consume one hour 15 minutes per day.

But when you leave your company, who owns your Twitter, YouTube, Facebook or even Gmail account? Legal experts in SA say the law is not clear.

“This is a grey area, and it would really depend on a thorough investigation of the history, purpose and origin of the social media account in question,” Pamela Stein, head of Employment Law at Webber Wentzel told Fin24.

“In order to demonstrate ownership, the employer would have to show that the social media account was clearly created for the purposes of promoting the growth of the business, and that this growth was achieved by social media activity generated during company time.”

Personal information

She added that factors over the ownership of a social media account would depend on whether the account had been created as part of the employment contract, or for the purpose of growing the organisation’s profile.

Unlike a company cellphone, computer or car, a social media account does not only exist on a mobile device, and the law assigns protections of personal information, as described in the Protection of Personal Information Act, which forbids unwanted sharing and exploitation of personal information.

“You have rights over your identity. However, if there was a clause in the contract of employment saying any personal account created during their employment is the property of the employer – perhaps the employer would have rights to it,” specialist technology attorney Russel Luck told Fin24, though he was careful to agree that the matter is not a settled one under South African law.

“If these accounts were set up so the employee could engage with the public as an extension of his work services, then perhaps the employer would have rights over it. Even more so if the email address used to verify the social media account is a work email, not personal one,” he added.

This reflects a US case in which Phonedog sued former employee Noah Kravitz over marketing on his Twitter account. The company alleged that 17 000 Twitter followers Kravitz had amassed was a customer list and demanded damages of $340 000.

A News24 survey revealed that 53% of social media users accessed the platforms while at while at work, and 3% said they would like to, but were not allowed.

Personal logins demand

Stein said that in SA, an employer seeking to claim a social media account would have to show just cause.

“Firstly, the employer would have to establish a basis for such a claim, and then sue the employee in the appropriate court depending on the cause of action.

“The employer could seek an order prohibiting the employee from any further use of the social media account and requiring the employee to take all reasonable steps to return the social media account to them.

“In addition, all social media sites allow users to report breaches et cetera and once such an order is obtained the social media platform could be notified and requested to assist.”

However, Luck argued that for a local company to demand personal logins to social media accounts would be a contravention of South African law.

“On the other side of the coin, SA law does follow international trends that you don’t need to give your employer your login details to your personal Facebook account – ie it’s unlawful to force an employee to do this.

“Where employers are making employment, promotion, dismissal or labour decisions based on access (or lack of access) to the personal Facebook account of an employee it would amount to unfair discrimination.”

Source: Fin24

A cyberattack caused the Internet disruptions during the Winter Olympics’ opening ceremony on Friday night, Olympic officials and security experts said.

Jihye Lee, a spokesman for the Pyeongchang Organizing Committee, confirmed Sunday that “the technology issues experienced Friday night were caused by a cyberattack.”

Mr. Lee did not elaborate on the cause but said that the attack had been quickly addressed and that systems had been stabilized by Sunday.

The cyberattack took out internet access and telecasts, grounded broadcasters’ drones, shut down the Pyeongchang 2018 website, and prevented spectators from printing out reservations and attending the ceremony, which resulted in an unusually high number of empty seats.

Security experts said they had uncovered evidence that the attack had been in the works since late last year. It was directed at the Pyeongchang Organizing Committee and incorporated code that was specifically designed to disrupt the Games or perhaps even send a political message.

“This attacker had no intention of leaving the machine usable,” a team of researchers at Cisco’s Talos threat intelligence division wrote in an analysis Monday. “The purpose of this malware is to perform destruction of the host” and “leave the computer system offline.”

In an interview, Talos researchers noted that there was a nuance to the attack that they had not seen before: Even though the hackers clearly demonstrated that they had the ability to destroy victims’ computers, they stopped short of doing so. They erased only backup files on Windows machines and left open the possibility that responders could still reboot the computers and fix the damage.

“Why did they pull their punch?” asked Craig Williams, a senior technical leader at Talos. “Presumably, it’s making some political message” that they could have done far worse, he said.

Talos’s findings matched those of other internet security companies, like CrowdStrike, which determined on Monday that the attacks had been in the works since at least December. Adam Meyers, vice president of intelligence at CrowdStrike, said his team had discovered time stamps that showed the destructive payload that hit the opening ceremony was constructed on Dec. 27 at 11:39 a.m. Coordinated Universal Time — which converts to 6:39 a.m. Eastern Time, 2:39 p.m. in Moscow and 8:39 p.m. in South Korea.

Attackers clearly had a target in mind: The word Pyeongchang2018.com was hard-coded into their payload, as was a set of stolen credentials belonging to Pyeongchang Olympic officials. Those stolen credentials allowed attackers to spread their malware throughout the computer networks that support the Winter Games on Friday, just as the opening ceremony was timed to begin.

Security companies would not say definitively who was behind the attack, but some digital crumbs led to a familiar culprit: Fancy Bear, the Russian hacking group with ties to Russian intelligence services. Fancy Bear was determined to be the more brazen of the two Russian hacking groups behind an attack on the Democratic National Committee ahead of the 2016 presidential election.

Beginning in November, CrowdStrike’s intelligence team witnessed Fancy Bear attacks that stole credentials from an international sports organization, Mr. Meyers said. He declined to identify the victim but suggested that the credential thefts were similar to the ones that hackers would have needed before their opening ceremony attack.

On Wednesday, two days before the ceremony, the Russian Ministry of Foreign Affairs made an apparent attempt to pre-empt any accusations of Russian cyberattacks on the Games. In a statement, released in English, German and Russian, the agency accused Western governments, press and information security companies of waging an “information war” accusing Russia of “alleged cyber interference” and “planning to attack the ideals of the Olympic movement.”

This was not the first Olympic opening ceremony that was a target for hackers. In the lead-up to the 2012 London Games, investigators uncovered attack tools and the blueprints to the Olympic stadium’s building management systems on a hacker’s computer.

It appeared that hackers planned to take out the power to the stadium, said Oliver Hoare, who led cybersecurity matters for the London Games. But officials successfully prevented an attack.

By Nicole Perlroth for The New York Times

PC distributor Mustek is assisting the City of Johannesburg (COJ) in a case where the city paid R6-million for 500 desktop computers to a service provider but the PCs were never delivered to the municipality.

In a statement, COJ mayor Herman Mashaba says he was informed that the city paid R6 million for 500 desktop computers that were ordered by the Group Information Communication Technology (GICT) department in 2014 but they were never delivered.

Opposition party the Democratic Alliance took over COJ from the ANC in August 2016. Mashaba, who took over the reins from the ANC’s Parks Tau, has publicly announced he intends to rid the city of corruption, which he blames on the previous administration.

Tip-off

According to Mashaba, the Group Forensic and Investigation Service (GFIS) received a tip-off from a member of the public who is closely linked to the service provider, saying that while she was working at the company, the city placed an order for 500 desktop computers.

It’s not clear which desktop PCs the city purchased but at retailer Incredible Connection, they range from R5 000 to R18 000. In the R6 million deal, the city paid R12 000 per computer.

Mashaba explains the computers were paid for with the assistance of officials working for the city but never reached the city.

The service provider, which is based in the south of Johannesburg, provides office supplies such as desktop computers, laptops, printer cartridges and toners, to name a few, he says.

A search and seizure operation was conducted this week by the members of the Hawks and officials from GFIS at the offices of the service provider.

Mashaba explains that about 37 computers worth R750 000 belonging to the city were seized during a joint operation.

He explains it is alleged that after winning the tender to supply the computers, the service provider placed an order with PC distributor Mustek to do the city’s imaging on the computers.

This was standard procedure, says Mashaba. “But with this batch, it is alleged that when he received it from Mustek, the service provider and his specialists in the information technology filed to remove the city’s imaging. Serial numbers of the seized computers were removed.”

In a statement sent to ITWeb, Mustek says: “In terms of Mustek’s distribution model, Mustek on-sells its products to its approved dealers, who then on-sell to end-users and public sector customers.

“Accordingly, we cannot comment on what transpired between the service provider and the City of Johannesburg. However, we are assisting the City of Johannesburg with their investigation of this matter.”

Preliminary investigations
It is alleged that most of the computers were sold to other clients and the 37 seized were used by the service provider’s staff members, Mashaba says.

He points out that preliminary investigations into the matter revealed that a city official was paid R1 million by the service provider for securing the deal for it. The city official allegedly took one official working for the service provider to a shop in the south which sells building material and spent R30 000 as a token of appreciation to the official, he adds.

“I was also informed that the service provider colludes with one of our officials who steals printer cartridges from our stores and sells them to the service provider who then sells it back to the city. When the team arrived at the property, they found one employee removing serial numbers from the boxes of the cartridges which had names of other municipalities and government departments.”

The team also established that the service provider illegally connected electricity supply to the property. City Power officials were called in and they removed the meter.

“The GFIS is currently conducting a number of investigations into contracts entered with ICT suppliers. I want to eliminate corrupt elements throughout the city, including investigating illicit deals and contracts that were secured by the previous administration and this includes our technology space,” concludes Mashaba.

By Admire Moyo for ITWeb 

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My Office News Ⓒ 2017 - Designed by A Collective


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