Author: Ben Debski

New ransomware attack sweeps the world

Posted on by Ben Debski

A ransomware attack has hit some of the world’s largest businesses, such as WPP, Merck and AP Moller-Maersk, demanding $300 in bitcoin to unlock each encrypted machine. Infected computers have even been reported in the Ukranian government and banking infrastructure, taking some systems temporarily offline. While the attack can be prevented with relatively straightforward precautions, stopping its spread is still a challenge.

The attack bears a striking similarity to the WannaCry attack in May, which infected over 200,000 computers in 150 countries

As reported by the Financial Times, the new attack has hit devices as varied as ATMs and supermarket checkouts. Ukraine’s central bank, the Kyiv Metro and Boryspil Airport have also been hit, as well as some businesses in India and Australia.

The attack bears a striking similarity to the WannaCry attack in May, which infected over 200,000 computers in 150 countries. Reports have emerged that this most recent attack, named ‘NotPetya’ by Kaspersky researchers, has utilised the same exploit. Both programs use code known as ‘Eternal Blue’, a program security experts believe was originally stolen from the US National Security Agency (NSA). The NSA is believed to have identified the exploit, but did not publically disclose its existence in order to make sure it would have access to it in the future. Microsoft patched the flaw in March, however devices that have not yet been updated are still vulnerable.

While WannaCry was quickly slowed, this latest attack has proved far more challenging to stop. The BBC reported that the attack can be prevented from encrypting a machine by creating a single, read-only file in a specific location, but there is not yet a way to prevent it from spreading to other networked machines. However, unlike WannaCry, the software does not attempt to spread beyond a single network, meaning a further large-scale spread is unlikely.

Ransomware has seen as resurgence in popularity due to modern processors being fast enough to swiftly encrypt data, and bitcoin providing a secure and untraceable method to receive payment for decryption codes.

Google hit with €2.4bn fine by EU over antitrust concerns

Posted on by Ben Debski

On June 27, Google was hit with its largest ever fine for favouring its own shopping service over rivals in search engine results. The record $2.7bn fine is the result of a seven-year investigation by EU antitrust regulators into competition concerns posed by the internet giant’s online influence.

Regulators concluded that Google had abused its market dominance as a search engine to “give illegal advantage” to its shopping service. Margrethe Vestager, the European Commissioner for Competition said Google had “abused its market dominance as a search engine by promoting its own comparison shopping service in search results, and demoting those of competitors”, rather than outperforming rivals through innovation.

Under EU rules, if Google does not end its search engine manipulation practices within 90 days, it will face further penalties

The manipulation of search engine results had “denied other companies the chance to compete on the merits” and “denied European consumers a genuine choice of services”, Vestager added.

The investigation found that when Google launched online shopping comparison platform Froogle, now known as Google Shopping, in 2004, it struggled to compete with established rivals. Google decided to give preference to Google Shopping offerings in search engine results to gain traction with customers. Algorithms were also designed to demote other shopping services, with even the most highly ranked non-Google provider appearing on page four of a Google search result. Since 95 percent of people using a Google search will click on one of the top ten results on the first page, this drastically reduces the traffic to competitors.

Under EU rules, if Google does not end its search engine manipulation practices within 90 days, it will face penalty payments of five percent of the average daily worldwide turnover of parent company Alphabet. Since the ruling legislates against specific business practices, the case has far reaching implications for competition policy and lays the groundwork for further legislation against Google.

This landmark ruling defines a new type of anti-competitive behaviour, preventing companies with a market share from favouring certain products, and goes some way to updating the outdated competition framework to deal with the tech sector.

The European Commission is at the forefront of bringing competition legislation into the digital age, and this Google ruling is part of a wider crackdown on tech firms over concerns such as data hoarding. Last month, the Commission fined Facebook €110m after finding it had provided misleading evidence in an earlier investigation into its acquisition of WhatsApp. Google is involved in several other EU investigations, relating to competition concerns posed by its Android operating system and online search advertising dominance.

This ruling has the potential to fray already strained relations between the US and EU. The US has accused EU regulators of issuing oversized fines to US tech companies. However, since seven of the largest ten tech companies by revenue are US firms, legislation is bound to particularly affect that part of the world.

The ATM turns 50

Posted on by Ben Debski

The automated teller machine (ATM), the device that started the original fintech revolution, celebrated its 50th birthday on June 27. Despite their role in changing the way people access money, however, the future of ATMs may be in doubt as cashless transactions continue to rise in popularity. To remain relevant, ATMs may soon be outfitted to perform a whole host of new functions.

The first ATM was unveiled in Enfield, London, in 1967 by Barclays bank. The machine’s inventor, John Shepherd-Barron, designed the device after finding himself frustrated and without cash when he missed the opening hours of his local bank branch. The first machine dispensed a maximum of £10, and to prevent fraud read a trace radioactive signature on the cheque that was matched against a pin number. In the years since, ATMs have expanded their functions, with many now accepting deposits, selling concert tickets, and scanning fingerprints.

To remain relevant, ATMs may soon be outfitted to perform a whole host of new functions

But in the 50 years since the first ATM was unveiled, their relevance has slowly declined. With the ease of cashless transactions, the need for constant access to banknotes is not as important as it once was.

However, as the number of bank branches declines, ATMs may find new a new job filling roles that can’t be replaced by an app. Head of Auriga Consulting’s international business Mark Aldred said banks that aren’t adapting and embracing what their ATMs could do are missing out. “A combination of self-service machines and staff could be the ticket to reviving the dwindling number of bank branches”, Aldred said. “This hybrid approach appeals most to customers, if banks can strike a balance between customer autonomy and personalised support and advice.”

Aldred added that many banks are struggling to adapt their legacy systems to allow ATMs to perform additional tasks, but a shift to cloud-based systems is giving banks the flexibility needed. “What is needed is a mindset change from the current position of offering very limited services and reducing operating cost as the single most important focus, to a more optimistic outlook of expanding revenue-generating consumer services with operating costs being only one management metric”, Aldred said. “The ATM is on the brink of some very exciting developments – with technology like artificial intelligence, data analytics and chatbots poised to bring an even better experience – but without the right infrastructure in place banks could risk missing out.”

Blockchain to underpin next generation trading platform for European banks

Posted on by Ben Debski

On June 27, seven major European banks, including HSBC, UniCredit and Deutsche Bank, announced that they are partnering up with IBM to create a modernised trading platform using blockchain and cloud technology. The platform, dubbed the Digital Trade Chain, is designed to simplify trade finance processes and enable SMEs to trade more efficiently and initiate new trading relationships across the European market.

While blockchain technology has been heavily hyped for its disruptive potential in the financial sector, it has only recently begun to edge towards practical implementation in mainstream finance. Crucially, the technology – which began as a cryptocurrency experiment – can be leveraged to connect the parties involved in a trade transaction, allowing them to interact with each other in a transparent and efficient manner. Using it to underpin the trading platform can thus help address key challenges like managing, tracking and securing domestic and international trade transactions.

While blockchain technology has been hyped for its disruptive potential, it has only recently begun to edge towards practical implementation

“In working with hundreds of clients around the world on a diverse range of blockchain projects, trade finance has emerged as one of the strongest use cases for the technology”, said Marie Wieck, general manager of IBM Blockchain. “By addressing the SME market, which faces challenges in data sharing and access to capital, the Digital Trade Chain Consortium is pioneering a unique blockchain solution with the potential for widespread impact.”

The concept is highly scalable, and the network is expected to grow in future to include additional banks from other countries, as well as trading partners such as shippers, freight forwarders and credit agencies. The project is expected to go into production by the end of the year.

IBM, which has already invested in several blockchain projects, was selected to build the platform by the consortium of banks through a global bidding process. “To make the Digital Trade Chain network a reality and enable it to serve potentially thousands of the consortium’s banking clients, we turned to IBM in enterprise blockchain to help us quickly bring this highly scalable system into production”, said Rudi Peeters, CIO of KBC, on behalf of the consortium. “Their blockchain and banking industry expertise will help us create a new platform for small and medium businesses in Europe that can enable faster, easier and cheaper trade transactions.”

Facebook in talks with Hollywood studios to produce original TV-quality shows

Posted on by Ben Debski

Facebook is in talks with Hollywood studios to start producing its own scripted shows, with a level of quality and budget to match traditional TV programming, as first reported in The Wall Street Journal. The social media giant indicated it was willing to commit to substantial production budgets of up to $3m per episode, demonstrating its dedication to competing with streaming services like Netflix.

The amount earmarked for each episode roughly matches the cost of an instalment of hugely popular Netflix shows like House of Cards and Orange is the New Black, although it is still dwarfed by HBO’s Game of Thrones, which at $8m per episode is one of the most expensive programmes on TV.

Facebook hopes to target audiences in the 13 to 34 age range, aiming for a large share of its enormous 1.94 billion-strong monthly user base

Facebook hopes to target audiences in the 13 to 34 age range, aiming for a large share of its enormous 1.94 billion-strong monthly user base. The 25-34 age range is the most common demographic of Facebook users, with 30 percent falling into this band. Reported projects already in the pipeline to appeal to millennial viewers are relationship drama Strangers and game show Last State Standing.

The landscape of TV has changed monumentally in the past decade, with fewer and fewer people tuning in for traditional linear scheduled programmes and more choosing to subscribe to streaming services like Netflix instead. Amazon was the first technology company to spot the potential popularity of streaming services, with Amazon Studios producing original shows as early as 2013.

The online availability of TV shows has also allowed viewers watch an entire series in one go. Netflix and Amazon have now departed entirely from traditional release schedules, and instead drop entire series’ at once, but Facebook has said it intends to stick to releasing episodes on a staggered basis.

TV is a large and lucrative advertising market that, until recently, most tech companies had not branched into. But, as viewers have moved from TV to streaming services, advertising dollars have followed them with many tech companies now taking steps towards streaming. Earlier this month Apple brought Sony co-presidents Jamie Erlicht and Zack Van Amburg on-board to lead its video programming efforts.

Nissan-Renault plans own driverless ride-hailing service

Posted on by Ben Debski

The future of ride-sharing services is almost certainly autonomous, and the Nissan-Renault Alliance is moving to make sure it has its own service ready to compete. The two companies have announced that they will develop their own driverless ride-hailing service to remain relevant in the changing automotive market.

According to Ogi Redzic, head of Nissan-Renault’s connected vehicles and mobility services division, the company is working to release its own self-driving electric fleet within the next decade, although not before 2020. “We think that the big opportunity for us is in automation, electric vehicles and ride-sharing and hailing together”, Redzic said in an interview with Reuters on June 23. He also said the company is currently testing self-driving vehicles, and any service they release would run on pre-mapped courses with specific start and end points.

The automotive industry is preparing for a future where fewer people own cars and instead rely upon ride sharing or hailing apps for transport

In February this year, Nissan and Renault signed a development contract with Transdev to develop a public and on-demand transportation service. In September 2016, the carmakers partnered with Microsoft to develop a standard platform to bring services like navigation and monitoring to internet connected cars.

The automotive industry is preparing for a future where fewer people own cars and instead rely upon ride sharing or hailing apps for transport. Both car manufactures and technology companies are racing to be the first to enter and capitalise on the market and ensure they don’t end up being made irrelevant by the other, but early efforts have demonstrated the shortcomings of each sector.

Presently, automotive companies have struggled with the software challenges of self-driving cars, while software giants have almost completely abandoned efforts to build cars themselves. In a recent interview with Bloomberg, Apple CEO Tim Cook revealed his company had been working on building a self-driving car, but has instead refocused the project on developing just the underlying technology. Earlier this month, Google’s self-driving technology division Waymo announced it was retiring its self-built autonomous cars in favour of fitting systems to regular, commercially available cars.

Traditional car builders like Ford and General Motors have favoured investments or acquisitions over building their own technology, but progress appears to be slow compared to technology giants. Earlier this month Honda announced its timeline for developing self-driving cars, but its targets place it well behind the projected development pace of companies likes Tesla and Google. While BMW and Tesla have made significant advances, both will have to establish a ride-hailing service to compete with companies like Uber and Lyft.

IBM explains the three tenets of cloud technology

Posted on by Ben Debski

Cloud computing is revolutionising the way business is done. For the companies that have taken up this technology, the insights that are being extracted from the data they have spent years collecting are creating efficiencies and inspiring innovations that were impossible before. For the companies that are yet to take advantage of the cloud, the question is not ‘should we do it?’ but ‘when can we do it?’.

While all cloud providers may seem similar, the reality is very different. Far more than just moving processes to a remote provider, the cloud represents a complete overhaul and reorganisation of data and systems. Even if any version of a cloud platform facilitates the capture, analysis and creation of insights, only a well-designed, scalable and adaptable cloud architecture maximises the value delivered from the data to the business

Drawing on decades of experience as a technology and solutions leader, IBM Cloud focuses on three tenets that put business clients first: enterprise strong, data first, and cognitive at the core.

Three tenets
With an enterprise strong cloud, businesses can focus on achieving a state of continuous innovation. IBM Cloud is designed from the ground up for industry applications, with data centres that are consistent worldwide and able to comply with varying security and regulatory requirements. An insurance company and an airline have vastly different needs, which is why IBM Cloud provides a mix of public and private clouds that will meet their requirements. IBM Cloud is also continuously upgraded with new technologies and capabilities, like Blockchain and trends analysis, enabling businesses to solve problems they never knew they had, or could not have anticipated before.

Yet, the cloud is only as good as its data. Prioritising data first acknowledges that a business’ data needs to be both accessible and controlled in order to enable extraction of information and insights to influence decision-making and competitive advantage. IBM Cloud embraces data diversity, and has the tools to ingest and cleanse a multitude of different data formats, from video to text, and ultimately make sense of it. Data is also strictly controlled, ensuring that a business’ knowledge is stored securely and not exposed, or shared with competitors.

Prioritising data first acknowledges that a business’ data needs to be both accessible and controlled in order to enable extraction of information and insights

Finally, IBM Cloud has cognitive systems built into its core. IBM’s cognitive system, Watson, can read and analyse data to provide the insights needed to support critical decisions, and provide recommendations to accelerate decision making. It does this using human-like senses; it can see images, listen to speech almost as accurately as a person, read 12 languages and ‘feel’ through sensors embedded in hardware. Businesses are able to see and make sense of their operations using massive amounts of data previously inaccessible or hidden.

Bound for the Cloud
In order for businesses to take full advantage of cloud technology, IBM has developed the Cloud Innovate methodology for guiding transition journeys. Speaking to The New Economy, Shankar Kalyana, IBM Fellow and Cloud CTO at IBM Global Business Services, explained that Cloud Innovate takes a complete view of an organisation’s systems before moving to the IBM Cloud.

“We looked at Cloud Innovate as giving that kind of end-to-end perspective — taking the time to look at the entire journey, from advice to operating, from the cloud to a lifecycle perspective, and across the entire solution stack of business applications”, Kalyana explained. No two cloud journeys are ever the same, so Cloud Innovate considers a business’ unique needs.

Cloud Innovate also addresses business systems as a whole, rather than as individual elements. Kalyana explained that a business’ software systems could be imagined as fitting into a two-by-two grid. One axis is the lifecycle — the path from idea to scaling-out — with the other being the solution stack — the business processes that run on the platform. With a large portfolio, a business’ individual systems will be at any number of spots within the grid. “Traditionally, what has happened from a client perspective and an enterprise perspective is that very rarely has someone actually looked at the entire two-by-two and its entire spectrum and continuum”, Kalyana said. This complete perspective of a business’ systems mean that all systems are moved to the cloud with forethought put into how they will interact once the journey is complete.

With IBM Cloud, businesses in sectors ranging from airlines to cement manufacturers are demonstrating tremendous depth of insight. Addressing crowds at IBM InterConnect 2017 in Las Vegas, John Granger, General Manager for Cloud Application Innovation at IBM Global Business Services, turned the spotlight on leaders at Kone, Etihad Aviation Group and CEMEX that have used IBM Cloud to make previously impossible developments a reality. The presentation is available online, and includes valuable insights about what the IBM Cloud is capable of achieving in different fields.

For organisations making the move to the cloud, in search of ways to influence how they make decisions that will help them gain a competitive advantage, IBM Cloud can help businesses tackle the transformations needed to take them into the future.

Join this webcast to learn more about IBM Cloud Innovate.

Imagination Technologies up for sale after losing biggest customer Apple

Posted on by Ben Debski

Shares in Imagination Technologies rose by 20 percent on June 22 after the company said it had put itself up for sale. The announcement follows a difficult few months for the UK graphic chip designer, whose value plummeted by 70 percent in April when its largest customer, Apple, announced it would terminate its relationship with the company.

Imagination Technologies has manufactured graphic chips for Apple products dating as far back as the early iPod, and royalties earned from Apple devices account for about half of the firm’s revenue. However, in April Apple announced it was developing capabilities to bring the manufacturing of graphics processing hardware in-house, and reliance on Imagination Technologies products would cease within two years. The firms have been in dispute over the legality of Apple’s actions ever since.

When Apple announced its break from Imagination, the firm alleged Apple would be unable to manufacture its own version of a chip without infringing on intellectual property rights

When Apple first announced its break from Imagination, the UK firm alleged Apple would be unable to manufacture its own version of a chip without infringing on intellectual property rights. Then, in May, Imagination took further action by launching a “dispute resolution procedure” with Apple over its plans. It is likely additional lawsuits will follow due to the potential devastating impact on Imagination’s profits if other customers attempt to take hardware manufacturing into their own hands too.

According to Imagination, the decision to sell was prompted by a number of groups expressing interest in a buyout over the past few weeks. “The board of Imagination has therefore decided to initiate a formal sale process for the group and is engaged in preliminary discussions with potential bidders”, the firm said in a statement.

Advances in graphics processing unit (GPU) technology since the days of early video games have been crucial to designing more user-friendly phones. A GPU is the electronic circuit that handles all computations related to image generation, removing this task from the phone’s central processing centre. High quality graphics processing capabilities have been instrumental in the ubiquitous adoption of smartphones since they enable the generation of high-quality images without hampering phone performance for a vastly superior user experience.

Centrica to sell gas plants to EPH in shift away from fossil fuels

Posted on by Ben Debski

In a further move away from fossil fuels and towards cleaner but less reliable renewable energy sources, Centrica announced on June 21 it will sell its two largest gas power plants to Czech provider EPH for £318m ($404m). The UK energy market has dwindling confidence in a financially prosperous future for fossil fuels, and Centrica’s move will add to Britain’s growing dependency on overseas energy providers.

The plants being sold, Langage and South Humber, hold contracts to provide backup power in the UK for the next four years and jointly employ around 130 people. In an indication of the rapidly changing energy market, Langage was only relatively recently opened, in 2010. The plant was commissioned to plug an expected gap in UK energy provision caused by the closure of coal and nuclear facilities. When Langage was put up for sale in 2014, Centrica cited plans to invest in smaller, more flexible, power stations instead.

Langage and South Humber hold contracts to provide backup power in the UK for the next four years

The agreed sale is Centrica’s latest move in a broad step back from fossil fuels, and arrive a day after the company announced the permanent closure of its Rough gas storage site, the largest in Britain. Rough acts as a reserve to store excess gas during summer months when need is comparatively low, so reliable supply can be maintained during high demand winter months, and accounts for about 70 percent of UK gas storage capacity.

The Rough closure has raised concerns British customers will be left increasingly vulnerable to price hikes from foreign providers during demand surges. Centrica said ageing wells in the storage facility meant it could no longer be operated safely and that refurbishment to prolong its life was not an option.

Two weeks ago, Centrica also sold off its Canadian oil and gas assets, and has begun investing in fast-response gas peaking plants and a power storage facilit, in anticipation of wider adoption of green energy production methods. Energy sources such as wind and solar are less reliable than fossil fuels. During times when production is high, solar or wind energy cannot be stored as a tangible substance, like oil or gas, so must be converted and stored in battery form. Building energy storage facilities that can stockpile renewable energy will be key to wider adoption.

EPH has taken the opposite route to Centrica, investing heavily in coal, gas and nuclear power assets in recent years under the assumption they will remain essential as a backup power source for a considerable time.

Boeing and Airbus at odds over the future of aircraft manufacturing

Posted on by Ben Debski

Both Boeing and Airbus have unveiled updated models of their planes at the 2017 Paris Air Show and shown very different focuses for the future. While Airbus has upgraded its biggest model, Boeing instead has focussed on smaller and more efficient planes. The new jets come as the international aviation industry is showing signs of cooling, with orders for new planes slowing down.

Just ahead of the show Airbus unveiled the A380plus, an upgrade of its A380 superjumbo with more efficient aerodynamics and 80 extra seats. The most noticeable changes to the plane are added winglets to the tips of the main wings, which Airbus claims will help the plane burn four percent less fuel than the old model.

The biggest passenger jet in the world, the A380 has seen its sales slump as airlines instead opt for smaller, more efficient twin-engine planes. The new A380 is an attempt to help larger planes make more economic sense, with Airbus claiming the overall improvements will cut costs for airlines by 13 percent per seat. Additionally, Airbus said the growing number of passengers in Asia and the Middle East will require jets with greater capacity, as airports in the region are already very congested.

The A380 has seen its sales slump as airlines instead opt for smaller, more efficient twin-engine planes

Boeing has taken a different direction with the launch of a new version of the twin-engine 737, the 737 Max 10. The Max 10 is 66 inches longer than the older Max 9 and has 10 extra seats, however the added size gives it a slightly smaller range. Boeing claims the model is extremely efficient and will have the lowest operating cost of any single-aisle plane ever produced

According to Bloomberg, Boeing has focussed on the 737 due to the lack of demand for jumbo passenger jets (such as its famous 747), and have even gone so far as to drop the four-engine plane category from its annual forecast. “We don’t see much demand for really big aircraft going forward’,’ said Randy Tinseth, Boeing’s Vice President for Marketing. “We find it hard to believe that Airbus will deliver the rest of their A380s in backlog.”

Slowing sales have taken their toll on Boeing, with the company announcing hundreds of layoffs in April. Declining demand for A380s has also seen Airbus recently contemplate slowing down production of its plane. Both manufacturers hold an effective duopoly over the commercial aviation industry, with no close competitors.

Alphabet throws weight behind $300m European biotech fund

Posted on by Ben Debski

Google’s parent company Alphabet is the latest firm to join a new $300m fund dedicated to investment in Europe’s biotechnology companies, demonstrating confidence in the potential of European healthcare innovation. The fund, run by life sciences investment firm Medicxi is also backed by the European Investment Fund and Swiss pharmaceutical giant Novartis.

Alphabet has several dedicated life science investment arms across the globe, which aim to maximise long term financial gains by taking bets on cutting edge medical research with the potential for mass adoption. Since people are living longer, end of life care is a field of growing interest for tech firms seeking investment opportunities with a long-term pay off. Diagnosis rates of diseases such as diabetes and dementia have ballooned in the last decade and an effective treatment would deliver huge financial benefits to investors.

Since people are living longer, end of life care is a field of growing interest for tech firms seeking investment opportunities with a long-term pay off

The Medicxi fund will focus specifically on products that have already reached Phase II clinical development, providing capital to expand the company at this stage. Focusing on products at this relatively advanced stage of development reduces the chance of blowing investment on treatments that seem promising but never make it to market.

Explaining the motivation for the fund, Medicxi co-founder Francesco De Rubertis said, “there is a funding gap because there is a maturing class of biotechnology companies now in Europe,” in a statement to Reuters.

Verily, the Alphabet subsidiary behind the investment in Medicxi’s fund, has also invested in GlaxoSmithKline, Novartis and Johnson & Johnson. Verily has funnelled money into the research departments of these companies, providing capital for the exploration of medical applications of technology such as robotics in surgery, and also diabetes management. Verily has hired investors with a lot of experience in drug research, such as Robert Califf, former head of the US Food and Drug Administration.

Other Alphabet outposts have specific fields of research for investment; Calico invests in companies whose primary research is in products that may decelerate the ageing process, and GV focuses on start-ups in the US. This strategy of breaking healthcare investment into divisions focussing on one field of research is designed to ensure investor expertise is not spread too thin; investors have a lot of knowledge about the research they will fund and are able to dig deeper into the science behind treatments, to make a much more educated guess about what will potentially work.

Toshiba faces fresh $400m lawsuit over historic accounting scandal

Posted on by Ben Debski

On June 13, Toshiba announced it was being sued by a group of foreign investors for JPY 43.9bn ($400m), the latest in a series of continued reverberations from the 2015 accounting scandal that rocked the company.

With this latest legal action, the number of claims taken against Toshiba since the revelations of inflated profit reporting, almost two years ago, stands at 26. The Japanese technology firm has paid damages totalling JPY 108.4bn ($980m), and has announced it has planned additional provision for the 2016 accounting year in anticipation of a further financial settlement for this most recent suit.

Toshiba has paid damages totalling JPY 108.4bn

In 2015, Toshiba admitted it had discovered systematic and long-term errors in accounting that had led to a backlog of overstated profits, dating from 2008. Toshiba initially estimated total profits for the seven year period had been overstated by JPY 151.8bn ($1.22bn). However, the scandal was drawn out when the full extent of the misstatement was revealed to be much larger than this, following an external investigation into accounting practices and company culture that saw this figure revised up to JPY 224.8bn ($2bn).

The investigation into business practises found a corporate culture in which subordinates felt uncomfortable raising issues with superiors, and managers set aggressive profit targets, putting workers under pressure to inflate results. At the time of the scandal, CEO Hisao Tanaka was forced to step down after the investigation determined he had been aware the company was inflating profits for a number of years. Toshiba has since overhauled its management team to reinforce its dedication to implementing better business practises.

This lawsuit is the latest setback in a difficult year for Toshiba. In April, the group warned it may be facing annual losses of over JPY 1trn ($9.1bn) due to overrunning costs incurred by Westinghouse (Toshiba’s US nuclear unit) in building nuclear plants in Georgia and South Carolina. Westinghouse has filed for bankruptcy and the financial turmoil threatens to increase Toshiba’s losses three fold.