Analysts say more senior executives at MTN may have to face the music after the resignation of its group chief executive officer Sifiso Dabengwa, writes GARETH VAN ZYL.
Dabengwa is the first executive casualty at MTN after the company announced two weeks ago that the Nigerian Communications Commission (NCC) had fined it $5.2bn for failing to switch off five million unregistered SIM cards in a timely manner.
His resignation has come amid a tumble of MTN’s share price from a recent trading peak of R192.45 on Friday October 23 at 13:30 to R157 at 10:47 on Monday November 9. MTN is Nigeria’s biggest mobile network with 62 million subscribers in that country as of September, according to a quarterly update from the company.
Meanwhile, the Johannesburg Stock Exchange is also investigating MTN for the way it made its announcement on Monday October 26 regarding the $5.2bn fine. Media reports about the fine surfaced hours before MTN made the SENS announcement on that day. The JSE said it is also looking into possible insider trading at MTN by studying the trades that happened before the announcement.
Dabengwa said in a statement on Monday November 9 that he stepped down in the interests of the company and shareholders because of the “most unfortunate prevailing circumstances occurring at MTN Nigeria”.
‘There has to be a fall guy’
“It was inevitable that heads would roll,” World Wide Worx managing director Arthur Goldstuck told Fin24 in his reaction to Dabengwa’s resignation.
This could be a sign that the CEO was ineffective at moving ahead with negotiations with the Nigerian regulator or that he was pushed by the board, said Goldstuck.
The way MTN has handled its communications regarding the Nigerian crisis also put the spotlight on how the company is managed and how it communicates, Goldstuck added.
“One of the big criticisms is that MTN hasn’t kept investors informed,” he said.
“It’s strategic decision-making is slow,” Goldstuck added.
But Goldstuck told Fin24 that Dabengwa’s resignation at the mobile network could result in a “shift in its entire thinking”.
Steven Ambrose, chief executive officer of research firm Strategy Worx, said it is no surprise that Dabengwa has quit. “When things go wrong, there has to be a fall guy. There has to be responsibility,” Ambrose told Fin24.
“I don’t think that MTN were being arrogant but I do think that they were somewhat remiss in their ability to understand what was going outside their control.
“And I think this is the first of a couple of high-profile resignations, to be honest,” Ambrose said.
He added that the CEO is like the “captain of the ship”.
“If the ship’s run aground, it’s ultimately the captain’s fault,” said Ambrose.
Ambrose also said he expected more senior heads to roll at MTN.
Meanwhile, Dobek Pater – a director and analyst at telecoms, IT and media research firm Africa Analysis – said he had expected senior executives at MTN’s Nigerian operations to step down first, rather than South African-based Dabengwa.
“I didn’t expect the CEO at group level to step down,” Pater told Fin24.
Pater described MTN’s $5.2bn fine in Nigeria as “excessive”. However, Nigeria is not cutting off MTN entirely as the NCC last week extended the mobile network’s licence to 2021, Pater explained.
“The fact that the NCC renewed the licence means that it’s not out to destroy MTN,” said Pater.
However, he also agreed that MTN needs to evaluate its communications regarding the Nigeria crisis.
“It’s still important to communicate. Definitely from the outset you want to be involved from a communications point of view,” he told Fin24.
Cons exploit Telegram ICO
Kaspersky Lab researchers have uncovered dozens of highly convincing fake websites claiming to be investment sites for an initial coin offering (ICO) by the Telegram messaging service. Many of these websites appear to belong to the same group. In one case alone, tens of thousands of US dollars’ worth of cryptocurrency were stolen from victims believing they were investing in ‘Grams’, Telegram’s rumoured new currency. Telegram has not officially confirmed an ICO and has warned people about fraudulent investor sites.
In late 2017, stories started to circulate that the Telegram messaging service was launching an initial coin offering (ICO) to finance a blockchain platform based on its TON (Telegram Open Network) technology. Unverified technical documentation was posted online, but there appears to have been no confirmation from Telegram itself. The resulting confusion seems to have allowed fraudsters to capitalise on investor interest by creating fake sites and stealing vast sums of money.
Kaspersky Lab researchers have discovered dozens of such sites, possibly belonging to the same group, claiming to sell tokens for ‘Grams’ and inviting investors to pay with cryptocurrencies including Bitcoin, Ethereum, lice litecoin, dash and Bitcoin dash. A record of transactions on one site revealed that the scammers were able to steal at least $35,000 US dollars’ worth of Ethereum from investors.
The researchers found that some of the websites were so convincing that even after Telegram and others began to issue warnings, they were still able to recruit potential investors. Most use a secure connection, require registration and generate a unique online wallet for each new victim, making it harder to track the money.
Judging by the content of the fake websites, it appears they may have common ownership. For example, several have the exactly the same ‘Our Team’ section.
“ICOs are a fairly risky investment and many people don’t yet fully understand how they work, so it is not surprising that high quality fake websites, with seemingly reassuring features such as a secure connection and registration are successful at luring people in. People wishing to invest in an ICO would do well to check with the company behind it and make sure they know exactly who they are giving their money to, or they may never see it again,” said Nadezhda Demidova, Lead Web-Content Analyst, Kaspersky Lab.
Kaspersky Lab offers the following advice for users considering investing in an ICO:
- Check for warning signs: for example, some of the fake Telegram ICO websites had the same wrong image next to the name of Telegram’s Chief Product Officer.
- Do your homework: always check with the brand’s official site to verify the legitimacy of the investment site and, if necessary contact the company’s ICO teams before investing any money or currency.
- Use reliable security solutions such as Kaspersky Internet Security and Kaspersky Internet Security for Android, which will warn you if you try to visit fake internet pages.
Crouching Yeti strikes
Kaspersky Lab has uncovered infrastructure used by the Russian-speaking APT group Crouching Yeti, also known as Energetic Bear, which includes compromised servers across the world.
According to the research, numerous servers in different countries were hit since 2016, sometimes in order to gain access to other resources. Others, including those hosting Russian websites, were used as watering holes.
Crouching Yeti is a Russian-speaking advanced persistent threat (APT) group that Kaspersky Lab has been tracking since 2010. It is best known for targeting industrial sectors around the world, with a primary focus on energy facilities, for the main purpose of stealing valuable data from victim systems. One of the techniques the group has been widely using is through watering hole attacks: the attackers injected websites with a link redirecting visitors to a malicious server.
Recently Kaspersky Lab has discovered a number of servers, compromised by the group, belonging to different organisations based in Russia, the U.S., Turkey and European countries, and not limited to industrial companies. According to researchers, they were hit in 2016 and 2017 with different purposes. Thus, besides watering hole, in some cases they were used as intermediaries to conduct attacks on other resources.
In the process of analysing infected servers, researchers identified numerous websites and servers used by organisations in Russia, U.S., Europe, Asia and Latin America that the attackers had scanned with various tools, possibly to find a server that could be used to establish a foothold for hosting the attackers’ tools and to subsequently develop an attack. Some of the sites scanned may have been of interest to the attackers as candidates for waterhole. The range of websites and servers that captured the attention of the intruders is extensive. Kaspersky Lab researchers found that the attackers had scanned numerous websites of different types, including online stores and services, public organisations, NGOs, manufacturing, etc.
Also, experts found that the group used publicly available malicious tools, designed for analyzing servers, and for seeking out and collecting information. In addition, a modified sshd file with a preinstalled backdoor was discovered. This was used to replace the original file and could be authorised with a ‘master password’.
“Crouching Yeti is a notorious Russian-speaking group that has been active for many years and is still successfully targeting industrial organisations through watering hole attacks, among other techniques. Our findings show that the group compromised servers not only for establishing watering holes, but also for further scanning, and they actively used open-sourced tools that made it much harder to identify them afterwards,” said Vladimir Dashchenko, Head of Vulnerability Research Group at Kaspersky Lab ICS CERT.
“The group’s activities, such as initial data collection, the theft of authentication data, and the scanning of resources, are used to launch further attacks. The diversity of infected servers and scanned resources suggests the group may operate in the interests of the third parties,” he added.
Kaspersky Lab recommends that organisations implement a comprehensive framework against advanced threats comprising of dedicated security solutions for targeted attack detection and incident response, along with expert services and threat intelligence. As a part of Kaspersky Threat Management and Defense, our anti-targeted attack platform detects an attack at early stages by analysing suspicious network activity, while Kaspersky EDR brings improved endpoint visibility, investigation capabilities and response automation. These are enhanced with global threat intelligence and Kaspersky Lab’s expert services with specialisation in threat hunting and incident response.
More details on this recent Crouching Yeti activity can be found on the Kaspersky Lab ICS CERT website.