One crime to hide another crime.. $ 10 million goes down the drain for two Mumbai Companies

In what should be an eye opener to the Corporate Sector, Law Enforcement and the Government, it is reported that two Indian conglomerates were forced to pay $5 million each to hackers who blackmailed them.

Refer Report in ET

Refer Report in businessinsider.in

Refer Report in track.in

The report hides the names of the conglomerates but states that the payments were made in May. It appears that the hackers collected series of email correspondence between the employees of the company and some other entity which revealed illegal activities and blackmailed the companies to pay the ransom.

Though the report names some hacker groups from Middle East, the possibility that the employees themselves have raised the demand through others cannot be ruled out.

It is stated that the Companies appointed “Private Detectives” to check the incident and did not report it to the authorities. Such Cyber Experts have also passed on their comments to the news reporters and these news agencies now have the identity of both the companies as well as the cyber experts who also have the knowledge of the incident.

So far so good. $ 10 million is lost and probably the two companies are large enough to absorb this loss and move on.

But the story does not end here. In fact another story has just begun and I want the law enforcement to move in and investigate. It is possible that the law enforcement also may be sucked in to this “Hiding of Information” and the companies may pay silence money to them. I therefore call the attention of the Central Government which is concerned about the “Black Money” and initiate a larger probe to bring the offence to full light and let the public know what really happened and where.

The fact that the two companies have paid a ransom of US $ 5 million each (Rs 30 crores each) indicate that the value of the offence which they had committed earlier about which the hackers successfully collected the ransom must of of the order of at least Rs 100 crores each. This must be a cognizable offence which the companies as well as the Cyber experts and the media have kept under the wraps. Neither the news paper nor the Cyber Experts involved have the right to hide a cognizable offence which may have ramifications including “Financing of Terrorists”.

Also if the Companies have paid the ransom to the Middle East entities, the payment itself will be in black money possibly in the form of bitcoins. Payment in black, buying Bitcoins both could be considered as additional offences committed today by these companies to hide their previous offences. The Companies therefore have committed further crimes to cover their earlier crimes.

Also, it cannot be ruled out that the hackers may make further claims perhaps through different entities and demand further ransom since for them these companies will be an eternal milchcow.

Now it is necessary to recognize that these two sets of offences and the potential loss in future will have adverse impact on e Investors in the Company and Banks who have lent to the conglomerate.

I therefore call upon SEBI and RBI to clarify to the public what action they are going to take in this news report.  If SEBI and RBI keep quiet, it would only indicate that they have been silenced too.

Probably the Courts also can take suo moto action and launch some proceedings. At least I hope the news channels who crave for such crime stories to pick up the incident and explore for the nation to know the truth.

Let us wait for some time for RBI and SEBI to clarify and then start the next level of questioning these agencies if they fail to act.

At the same time, I would have preferred the two companies to have surrendered to the authorities instead of paying the ransom and requested the Government to pardon them. If they failed to do so earlier for whatever reasons, they should do so at least now.

Naavi

 

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About Vijayashankar Na

Naavi is a veteran Cyber Law specialist in India and is presently working from Bangalore as an Information Assurance Consultant. Pioneered concepts such as ITA 2008 compliance, Naavi is also the founder of Cyber Law College, a virtual Cyber Law Education institution. He now has been focusing on the projects such as Secure Digital India and Cyber Insurance
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One Response to One crime to hide another crime.. $ 10 million goes down the drain for two Mumbai Companies

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