Following the hacking of its accounts, Gauteng agency Blue IQ has introduced increased security measures to prevent further incidents.
This is after the agency lost over R2 million as a result of cyber attacks on the Innovation Hub Management Company.
The company reported in its financial statements for the 2008/9 period that over 218 fraudulent transactions, which occurred from 15 to 18 November 2008, amounted to losses of over R9 million. The company only recovered R6.5 million by March last year and recorded a loss of R2.4 million.
The Innovation Hub is a wholly-owned subsidiary of the troubled Blue IQ Investment Holdings, which has also previously been slated for poor financial management and weak internal controls.
The agency says that, in response to the attacks, various steps have been taken by the Innovation Hub to prevent further incidents after electronic identities and passwords were stolen by means of spyware or key-logger software.
Amanda Nair, CEO of Blue IQ Investment Holdings, says security cameras have been installed and a biometrics-based access system has been deployed in the agency's finance offices.
The company's current bank account has been moved to First National Bank, as the “Internet banking system has more securities built into it, as all approvers also have a digital certificate”.
While Blue IQ and the Innovation Hub had previously adopted an anti-fraud and corruption and risk management policy, Nair adds that the fraud prevention and whistle-blowing policy and action plan have been implemented. Anti-fraud and corruption policies have been in place since the 2005/6 financial year and the cyber attacks occurred while the policies were in place.
Still investigating
The company says the fraud was reported to the police and this was followed up with a forensic investigation by PricewaterhouseCoopers forensic investigators.
Nair says investigations are still ongoing, adding that none of the employees of the Innovation Hub were implicated in the fraud.
“A contract with a service provider suspected in the incident has been terminated. The matter had also been reported to the South African Police Services (SAPS). To date, 205 subpoenas were completed and handed to SAPS to fast-track the feedback from banks regarding details of the relevant bank accounts used and for search warrants on suspects,” Nair explains.
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