DarkSide hacked a Toshiba unit, conglomerate to undergo a strategic review

The DarkSide ransomware group hacked a Toshiba Corp facility, overshadowing an announcement of a strategic review for the Japanese conglomerate, which is under pressure from activist shareholders to find a buyer.

Toshiba Tec Corp, a $2.3 billion company that makes barcode printers, was hacked by DarkSide, the organisation widely suspected of being behind the recent Colonial Pipeline attack, according to its French subsidiary.

However, only a minimal amount of work data was lost, it added.

"DarkSide has about 30 groups who are constantly attempting to hack businesses, and they were successful this time with Toshiba," Takashi Yoshikawa, a senior malware analyst at Mitsui Bussan Secure Directions, said.

During pandemic lockdowns, employees accessing company computer systems from home have made businesses more susceptible to cyberattacks, he said.

According to screenshots of DarkSide's post given by the cybersecurity company, more than 740 gigabytes of data, including passports and other personal details, was compromised.

DarkSide's multiple websites, according to security researchers, have become inaccessible.

Hackers encrypt data and demand payment in cryptocurrency to decrypt it, increasing the number and size of ransomware attacks. They are gradually releasing or threatening to release stolen data unless they are paid more.

The Irish health service announced on Friday that it had shut down its IT systems following a "major" ransomware attack.

The attack programme was distributed by DarkSide, according to investigators in the US Colonial case, which involves Russian speakers and avoids hacking targets in the former Soviet Union. DarkSide allows "affiliates" to hack into targets in other countries, and then manages the ransom and data release.

Toshiba announced the formation of a strategic review committee and the appointment of UBS as a financial advisor, amid demands from shareholders to explicitly pursue proposals from potential suitors after rejecting a $20 billion take-private bid from CVC Capital earlier this year.

Independent directors will oversee the study, which is intended to assist the board in considering a new business strategy to be presented by management by October.

Within the company, the CVC offer was met with fierce opposition. Some speculated that the company's decision to keep management was intended to protect former CEO Nobuaki Kurumatani from activist shareholders.

At the company briefing on Friday, 3D Investment Partners and Farallon Capital Management, Toshiba's No. 2 and No. 3 shareholders, respectively, chastised the company for being unwilling to accept takeover offers.

Satoshi Tsunakawa, Chief Executive, replied that the company has "no qualms about considering a variety of proposals to maximise corporate value, including going private."

Other private equity firms, such as KKR & Co Inc and Bain Capital, are said to be involved in Toshiba, according to sources.

According to an interview with Yuji Sugimoto, the head of Bain Capital's Japan operations, the Asahi newspaper announced on Friday that Bain Capital is not considering buying Toshiba.

Toshiba is a shadow of its former self, beset by accounting scandals, huge writedowns for its nuclear company in the United States, and the sale of its chip unit.

However, it is one of Japan's few producers of nuclear power reactors and produces defence equipment, so any sale will need to be approved by the government.

Toshiba projected a 63% increase in annual operating profit to 170 billion yen ($1.6 billion) on Friday, rebounding from pandemic-related suffering in the previous year and reaping the benefits of restructuring steps. This comes after a 20% drop in profit the previous year.

Following Kurumatani's resignation last month, Toshiba nominated four new board members. Investors were allegedly forced to accept preferred board appointments before a shareholder meeting last year, putting Kurumatani under fire.

In March, shareholders overwhelmingly approved an impartial inquiry into the claims, marking a landmark moment for Japanese corporate governance. The investigation is expected to be completed before the annual general meeting on June 25.

George Olcott, a former UBS banker who is now an independent board member at Japanese beer maker Kirin Holdings, was among the board nominees announced on Friday.