Espionage rooted in corporate world (Africa)

February 28, 2006

Mercy Randa Nairobi

Katarina Juma and her colleagues had no idea what awaited them in their Law Africa office at Upper hill on that Thursday morning.

One by one they reported to work only to be welcomed by the a scene of dismantled computers. All the hard discs had been stolen.

"This is not the first time this is happening to us," says Ms Juma. "The only advantage we have is that we always back up our data so that we are not handicapped after the raids."

The raid came just a month to the launch of a product that had cost them about Sh20 million, but from which they expected to reap about $1 million (Sh72 million). They are convinced it was the work of their competitors.

The company publishes electronic law reports and books. It had been operating regionally for seven years and has seen some of its competitors rise and fall. The data they have collected within this period is the backbone of their business.

Crucial data

Stealing hard discs that contain company data is a common way competitors use to spy on success tips.

On the eve of Labour Day in 2004, local recruitment agency MyJob'seye's offices were also broken into and computer hard discs stolen.

General manager Neil Riberio is also convinced that it was the work of one of their rivals. "Barely a month later, a new Web site similar to ours was launched and all our clients got e-mails from them," he said. MyJob's Eye is an electronic recruiting agency started in August 2003.

Its Web site had about 5,800 CVs and profiles of more than 2,800 potential employers plus other vital e-mails. They back up the e-mails fortnightly. When it comes to business, every data is a priceless commodity. The data collected is transformed into information, which then form the ground knowledge that runs the business.

Theft of such information can cripple a business, especially if the data is not backed up. Data gathered is mostly on customer needs, decision making process, the competition and conditions in market and general economic, technological and cultural trends. This kind of data collection is what is known as business intelligence.

There is, however, a thin line between business intelligence and corporate espionage. The difference is in the way the data is acquired. Most intelligence gathering is legal. A competitor can go as far as hiring former employees of its rivals, or even going through their trash for information that can be pieced together for use.

The legality line is crossed when money is paid to acquire data. For example, breaking into a competitor's office like in the cases of Law Africa and MyJob'sEye or intercepting phone calls and bugging offices. The benefits of spying for those who succeed are too large to be ignored. Spying can salvage a declining business as well as save it embarrassment among competitors.

Most large corporations still cannot openly acknowledge the existence of departments to perform the legal aspects of corporate espionage. However, many spend considerable amounts on precautions.

For instance, MyJob'sEye sets aside about Sh10, 000 monthly for what Mr Riberio calls business intelligence.

Mr Rakesh Rao, the CEO of Crown Berger, refused to disclose how much he budgets for corporate espionage, but admitted that such a budget exists.

He also has been a victim of the nasty art of espionage in which he lost data to a competitor. Some unidentified people broke into the Crown Berger factory on Mogadishu Road in Industrial Area and stole five UPSs from the finance department and Research & Development and a spectrometer (a glass used for checking paint quality) valued at Sh.3 million.

They had backed up the data from the finance department but the paint formulas all went and they had to start from scratch. The loss was estimated at Sh4 million. "I cannot exactly say how much the budget is because we work on a case to case basis," Mr Rao said.

Much as it has not been formally recognised, corporate espionage is growing at a high rate. Security and investigation companies are eating their fair share of the cake, making money off business intelligence.

Mr Julius Torosho, an investigator at Hawk Eye Security firm, says they are sometimes hired by companies to spy on competitors. The job, which may take about two to three weeks, entails tracking down the target's operations. They also send their staff on undercover operations at the work places of the targets.

Spies for hire

The espionage industry isn't shy about what it offers either. Mr Raphael Musau, a Britain-trained fingerprint expert at Hawk Eye, said: "Whether you need to know when a competitor will be launching their new product, or what your competitor is spending their research money on, we will find out."

They have ethics and turn down offers that could land them in trouble. For example, they cannot break into someone's premises to steal data. Theirs is purely business intelligence, he says.

But when spying goes wrong it can destroy reputations and even damage corporate brands.

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