E-crime costs UK retailers £200m a year

Internet crime is the biggest emerging threat to the UK’s retail sector, the British Retail Consortium (BRC) claimed today.

This type of criminal activity is a growing threat to retailers as more and more Britons choose to shop online and through their mobile devices.

The BRC’s first e-crime study, which assesses the make-up and scale of e-crime, estimates that the total cost of e-crime to retailers in 2011-12 was at least GBP205.4m.

The figure includes GBP77.3m in losses from crimes such as personal identification-related fraud, refund fraud and phishing, as well as crime-prevention costs and legitimate business lost as a result of such measures – for example honest customers being deterred from continuing with an online purchase by additional online security measures.

Furthermore, the retail trade association asserts that e-crime is twice as costly as overall retail crime, in proportion to the total value of sales. It represents 0.75% of the GBP28bn of online retail sales in 2011, while the GBP1.4bn cost of retail crime as a whole is 0.36% of the GBP303bn value of all retail sales.

The UK is seen as a world leader in online retailing, with the biggest Internet spend per-capita of any country and 11% of global Internet retail sales, but the BRC said today that the government and law enforcers need to take e-crime more seriously if the sector is to maximise its contribution to economic growth.

It claimed that many retailers lack confidence in the official response to e-crime, with 60% of those questioned saying it was unlikely they would report any more than 10% of e-crimes to police.

Specifically, the BRC is calling for consistency on reporting, recording and investigating e-crime across the country and for more police resources to be directed towards e-crime.

Retailers who took part in the BRC’s first e-crime study, which was carried out in April and May 2012, included supermarkets, department stores, fashion, health and beauty stores and mixed retail.

Citigroup’s PE arm invests $138m in the UK arm of Indian travel group Cox & Kings

Indian travel and tours company Cox & Kings Ltd (BOM:533144) announced today that CVCI Private Equity, part of US financial services giant Citigroup Inc (NYSE:C), has agreed to pour about USD137.7m (EUR110.4m) into its British unit Prometheon Holdings (UK) Ltd.

The binding deal comes after the board of the Indian company approved in in May plans to raise further capital of up to USD140m through sale of Prometheon stock. Today, Cox & Kings said it will use the money mainly to retire some of the debt raised by Prometheon as part of its takeover of sector player Holidaybreak Plc in July 2011.

The newly-agreed transaction is subject to obtaining certain regulatory nods and on the fulfillment of customary conditions. Cox & Kings did not say when it expects to close it.

In June, the Economic Times quoted informed people as saying that the Indian company was holding talks with private equity funds like KKR & Co LP (NYSE:KKR), Bain Capital LLC, The Carlyle Group LP (NASDAQ:CG) and TPG Capital LP regarding the potential disposal of a minority stake in its British subsidiary. The newspaper’s list, however, did not include Citi’s venture capital arm.

Shell’s $400 million Niger Delta security funds better invested on local communities — report

Oil giant Shell has spent almost $400m in three years guarding its installations in the Niger Delta, including maintaining its own 1,200-strong internal ‘police’ force, running a network of plainclothes informants and supplying government forces with equipment, according to Platform, a campaign group.

Platform combed through leaked internal documents and WikiLeaks diplomatic cables to unpick Shell’s $1bn security spend between 2007 and 2009 – of which almost 40% was spent protecting its Nigerian facilities. The group also looked at Shell’s close relationship with government forces dating back to 2003. The Observer reported on the organisation’s findings yesterday.

Shell’s colossal Niger Delta facility has come under frequent attack from armed insurgents, who are frustrated by the local population’s exclusion from the Delta’s incredible oil wealth and by pollution. Kidnappings of oil workers, robberies and attacks on pipelines were frequent during the period covered by the documents.

Shell’s facilities in the Niger Delta are protected from armed insurgents by 600 police and 700 members of the Joint Task Force (JTF), which combines army, navy and air force. Platform claims in 2008 Shell spent almost a third of its global security budget – $99m – on ‘third parties’, which is believed to include supporting such Nigerian government forces such as the JTF.

‘Shell has supplied these government forces with gunboats, helicopters, vehicles, food, accommodation, satellite phones, stipends and large-scale funding throughout years of conflict in the Delta region,’ Platform notes.

Related article: Embassy cables reveal Western complicity in Nigerian oil conflicts

Platform is concerned that JTF has a poor record on human rights violations. In 2009 alone, Platform estimates Shell provided $65m to the Nigerian government. ‘This is a staggering transfer of company funds and resources into the hands of soldiers and police known for routine human rights abuses,’ the campaign group notes. The same year, the Nigerian military used helicopter gunships to launch an campaign lasting several weeks against the camp of a militant leader named Government Tompolo in the Delta.

The US State Department said the attacks displaced ‘tens of thousands’ and cost them their livelihoods, as well as killing an unknown number of people.

Platform suggests that at the time of these attacks Shell was providing extensive financial support to the JTF. ‘Instead of holding government forces to account by ensuring that abuses were properly investigated and appropriate punishment or disciplinary action taken, Shell rewarded the JTF with lucrative funding and support,’ Platform notes.

In many cases, Shell’s security spending may only serve to entrench the conflict. The security spending documents show Shell spent $75m on a mysterious category marked ‘Other’. WikiLeaks cables reveal that in 2003 Shell was among oil companies making payments of up to $300 a month, and Shell ‘frequently’ pays off armed groups, for example to regain access to closed-off facilities.

But this can encourage groups to battle for control of particular towns or facilities: in one case documented by Platform, the town of Rumuekpe was completely destroyed by rival armed groups struggling for access to alleged payments from Shell, with an estimated 60 people killed.

Meanwhile, of the $35m spent on private security contractors in 2008, Platform claims that local contracts often turn out to be with the very militants they are targeting. And the hardline approach of external contractors, many of whom have shipped in as contracts dry up in Iraq and Afghanistan, only fans the flames of conflict. Private contractors often give orders to military personnel guarding oil facilities, muddying the line between corporate and government responsibility for incidents, Platform adds.

‘What is striking about Shell’s security spending in Nigeria is its ineffectiveness,’ the report notes. Investing in communities and cleaning up ‘decades’ of pollution, the report suggests, could yield very different results.

This version of the story was first published by The Bureau of Investigative Journalism.