Lasco Financial reveals cyber theft - Pfizer damages decision imminent
Lasco Financial Services Limited revealed that the bulk of its eightfold growth in bad debts related to burglary and cyber theft sometime in its most recent financial year ending March.
Meantime, the shareholders of Lasco Distributors Limited were told that the court's decision on the damages to be paid under the Pfizer case was pending, in separate meetings on Friday.
Lasco Financial's managing director Jacinth Hall-Tracey disclosed details about the hack, but assured shareholders at their annual general meeting that measures were put in place, including software upgrades, staff training and cyber insurance to prevent future occurrences.
Lasco Financial's bad debts increased to $27.5 million as at March 2017 from $3.2 million a year earlier. The bulk of the increase related to the two events.
"We had a burglary at one of our cambio locations and currency totalling $1.4 million was stolen. This is currently under negotiation with our insurance company," said Hall-Tracey. "We also had the lodgement of a malware in our money services system and this allowed cyber burglars to send transactions amounting to $11.5 million. This is currently also in an arrangement with MoneyGram to recover a portion of the loss," she said.
Two-thirds of the company's revenue comes from remittances via its MoneyGram agent network, which now totals 135 agents, following the addition of 20 agents during the year.
SOME FUNDS RECOVERED
Tracey added that some of those funds from the cyber theft have already been recovered. The thefts would have contributed to lowering the company's annual net profit to $187.8 million from $203.4 million a year earlier.
Lasco Financial wrapped up the year with a loan portfolio of $297 million, up from $207 million a year earlier, and has since expanded the portfolio to around $500 million. Total assets also grew from $1.1 billion to $1.5 billion in 2017.
The financial firm was the first of the three Lasco affiliated companies to hold back to back annual general meetings on Friday.
The shareholders of Lasco Distributors Limited were advised at their meeting that the judgment on the Pfizer case, including the damages to be awarded, was now expected this month, having missed the end-September date.
The judgment is being described as "probably" the longest judgment in the history of Jamaica, according to Lasco Distributor's lawyer Vincent Chen.
"We hope that the size of the award will be equal to the length of the ruling," Chen said at the AGM, while noting that there could be more court battles ahead.
"We are pretty confident she will give her judgment in October," said Chen. "We are going to get a decision in the first instance before the end of this year. If someone appeals we hope we can get the appeal heard within six to nine-months," he said. "When it goes to the court of appeal, and the format is followed, then it doesn't take long - it would take another three months. After that, it is a matter for the court of appeal to make a judgment. And I cannot predict that aspect of it."
Lasco Distributors Limited wants US$490 million as the full payout from Pfizer in the long-running court case, documents related to the case indicate.
Pfizer, however, has countered that the Jamaican entity should be paid no more than US$518,000 for the period it was not allowed to sell the drug.