Thousands of Morrisons staff personal details leaked online

The posting of Morrisons staff personal details online came only hours after Dalton Philips, the chief executive, boasted of new IT systems. Photograph: Christopher Thomond for the Guardian

The personal details of thousands of Morrisons staff including salaries, bank account details and addresses have been stolen and published online.

Police are investigating the serious security breach which occurred on Thursday night and is believed to have been the result of an internal leak, with data copied onto a portable storage device and taken out of Morrisons' Bradford headquarters.

A disc of the data, which has details of staff from director level to the shop floor, was also sent anonymously to a local paper in Yorkshire, the Telegraph & Argus, by a "concerned Morrisons shopper".

The leak appeared timed to cause maximum embarrassment to Morrisons in the wake of a massive profits warning on Thursday, which sent shares diving 12%. It also came hours after the chief executive, Dalton Philips, boasted that new IT systems would help to turn around Morrisons' performance.

Morrisons said that all the staff details published were put on an unspecified location on the web for a few hours and were taken down immediately when they were discovered. It said in a statement: "We can confirm there has been no loss of customer data and no colleague will be left financially disadvantaged." It is working with police to identify the source of the theft, which "initial inquiries" suggested was not the result of an external breach of its security systems.

It said it was now "urgently reviewing our internal data security measures," and was working with UK banks and credit check service Experian to help colleagues secure their bank accounts.

Morrisons said it had contacted staff via email and its Facebook page to inform them of the leak. It also set up an email address for questions. But some staff took to social media to express their anger and complain that they had not been informed.

One post on Facebook reads: "I've been at work for nine hours and nobody has told me – good communication M!"

Another staff member wrote: "Reading about this on Facebook does not inspire confidence, we should have been notified by phone by our HR departments first thing this morning."

Another post on Facebook reads: "Ironic that Dalton Phillips was on BBC Breakfast yesterday stating he'd updated the IT systems from the 1950s. Those systems were probably too old to be hackable!"

Another post appeared to threaten action against those complaining about the leak: "This is further bad publicity for our company at a difficult time, and I'd like to ask all of my fellow colleagues to think carefully about what they say in the public domain and the effect it could have on our reputation."

The leak is the latest embarrassing issue for Morrisons, just weeks after the supermarket group's treasurer and head of tax, Paul Coyle, was arrested and questioned over alleged insider dealing relating to trading in the shares of Ocado, Morrisons' partner for its new online grocery-delivery service.

BP closer to restoring US operations after deal with government agency

BP is still awaiting a US court ruling about whether it was grossly negligent over the Deepwater Horizon blowout in 2010. Photograph: AFP/Getty Images

BP is closer to restoring its operations and reputation in the US after agreeing a deal with environmental protection authorities that it will enable the oil firm to bid for new drilling rights in the Gulf of Mexico.

The British-based group had started legal proceedings against the US environmental protection agency (EPA) which had banned BP from new contracts on the grounds that it had failed to correct problems properly since the Deepwater Horizon disaster in 2010.

BP said it had now dropped its law suit after resolving outstanding problems with the EPA but the firm will have to abide by monitoring arrangements with the agency for the next five years.

"After a lengthy negotiation, BP is pleased to have reached this resolution, which we believe to be fair and reasonable," said John Mingé, head of BP America. "Today's agreement will allow America's largestenergy investor to compete again for federal contracts and leases."

BP, which claims to have invested almost $50bn (£30bn) in the US over the past five years, is still awaiting a court ruling about whether it was grossly negligent when it caused the biggest sea-borne pollution incident in American history.

The firm is confident it will be judged to have acted responsibly but a gross negligence finding would expose BP to billions of dollars worth of extra fines.

Some environmental groups have expressed opposition to the EPA deal. The Gulf Restoration Network, based in New Orleans, told the New York Times it was outrageous to allow BP to expand its offshore interests given its track record.

Why the European Central Bank should buy American

European Central Bank president Mario Draghi faces legal obstacles if the ECB embarks on quantitative easing. Photograph: Ralph Orlowski/Reuters

The European Central Bank needs to ease monetary policy further. Eurozone-wide inflation, at 0.8%, is below the target of "close to 2%", and unemployment in most countries remains high.

Under current conditions, it is hard for the periphery countries to reduce their costs to internationally competitive levels, as they need to do. If inflation in the eurozone as a whole is below 1%, the periphery countries are condemned to suffer painful deflation.

The question is how the ECB can ease policy, given that short-term interest rates are already close to zero. Most of the talk in Europe concerns proposals to undertake quantitative easing (QE), following the path taken by the US Federal Reserve and the Bank of Japan. This would mean expanding the money supply by buying member countries' government bonds – a realisation of the ECB president Mario Draghi's "outright monetary transactions" scheme, announced in August 2012 in the midst of growing uncertainty about the euro's future (but never used since then).

But QE would present a problem for the ECB that the Fed and other central banks do not face. The eurozone has no centrally issued and traded Eurobond that the central bank could buy. (And the time to create such a bond has not yet come.) By purchasing bonds of member countries, the ECB would be taking implicit positions on their individual creditworthiness.

That idea is not popular with the eurozone's creditor countries. In Germany, ECB purchases of bonds issued by Greece and other periphery countries are widely thought to constitute monetary financing of profligate governments, in violation of the treaty under which the ECB was established. The German constitutional court believes that the outright monetary transactions scheme exceeds the ECB's mandate, though it has temporarily tossed that political hot potato to the European court of justice.

The legal obstacle is not merely an inconvenience; it also represents a valid economic concern about the moral hazard that ECB bailouts present for members' fiscal policies in the long term. That moral hazard – a subsidy for fiscal irresponsibility – was among the origins of the Greek crisis in the first place.

Fortunately, interest rates on Greek and other periphery-country debt have fallen sharply over the last two years. Since he took the helm at the ECB, Draghi has brilliantly walked the fine line required to "do whatever it takes" to keep the eurozone intact. (After all, there would be little point in upholding pristine principles if doing so resulted in a breakup, and fiscal austerity alone was never going to return the periphery countries to sustainable debt paths.) At the moment, there is no need to support periphery-country bonds, especially if it would flirt with illegality.

What, then, should the ECB buy if it is to expand the monetary base? For several reasons, it should buy US treasury securities. In other words, it should go back to intervening in the foreign-exchange market.

For starters, there would be no legal obstacles. Operations in the foreign-exchange market are well within the ECB's remit. Moreover, they do not pose moral-hazard issues (unless one thinks of the long-term moral hazard that the "exorbitant privilege" of printing the world's international currency creates for US fiscal policy). Finally, ECB purchases of dollars would help push down the euro's exchange rate against the dollar.

Such foreign-exchange operations among G7 central banks have fallen into disuse in recent years, partly owing to the theory that they do not affect exchange rates except when they change money supplies. But in this case we are talking about an ECB purchase of dollars that would change the euro money supply. The increase in the supply of euros would naturally lower their price. Monetary expansion that depreciates the currency is more effective than monetary expansion that does not, especially when, as is the case now, there is very little scope for pushing short-term interest rates much lower.

Depreciation of the euro would be the best medicine for restoring international price competitiveness to the periphery countries and reviving their export sectors. Of course, they would devalue on their own had they not given up their currencies for the euro 10 years before the crisis (and if it were not for their euro-denominated debt). If abandoning the euro is not the answer, depreciation by the entire eurozone is.

The euro's exchange rate has held up remarkably during the four years of crisis. Indeed, the currency appreciated further when the ECB declined to undertake any monetary stimulus at its meeting on 6 March. Thus, the euro could afford to weaken substantially. Even Germans might warm up to easy money if it meant more exports.

Central banks should and do choose their monetary policies primarily to serve their own economies' interests. But proposals to co-ordinate policies internationally for mutual benefit are fair. Raghuram Rajan, the governor of the Reserve Bank of India, has recently called for the advanced economies' central banks to take emerging-market countries' interests into account via international co-operation.

ECB foreign-exchange intervention would fare well in this regard. This year, the emerging economies are worried about a tightening of global monetary policy, not the policy loosening that three years ago fuelled talk of "currency wars." As the Fed tapers its purchases of long-term assets, including US treasury securities, it is a perfect time for the ECB to step in and buy some itself.

Boohoo.com fashion website soars on stock market – ending day at £840m

Loud and proud. Boohoo.com makes extensive use of social media. Photograph: boohoo.com

The clamour to invest in fashion website Boohoo.com put a rocket under its share price when it floated on Friday, with the fast-growing fashion website finishing the day with a market value of £840m, nipping at the heels of established FTSE 250 retailers such as Ted Baker andDebenhams.

Shares in the Manchester-based company started trading on the junior Aim market at 50p but within 10 minutes had jumped 70% to 85p. They closed up 40% at 70p

The enthusiastic reaction from investors added to the paper wealth of the Kamani family who have already pocketed £240m from selling some of their majority stake in the business. The 44% stake retained by the family and other board members was worth £370m at close of trading.

Last week the retailer confirmed its IPO had raised £300m, with £50m of that retained for investment. The offer is understood to have been heavily oversubscribed.

The website, which targets 16-24-year-olds, was founded in 2006 by Mahmud Kamani and his business partner Carol Kane. The pair previously ran a successful business supplying high street rivals such asPrimark and New Look and are joint chief executives of the listed company. Boohoo.com, which makes extensive use of social media, has been described as an online Primark, its mainstay being dresses selling for between £12 and £25.

Already shipping to 100 countries, Boohoo.com has impressive margins and made a profit before financial charges of £10m on sales of £92m in the 10 months to December. That compared with profits of just £3.5m a year ago.

But the runaway valuation has fuelled fears that the stock market is once again in the grip of dotcom fever. Shares in AO World, the domestic appliance website, soared as high as 44% during its first day of trading last month.

"As an online-only store, Boohoo.com is unconstrained by politics and a bricks and mortar based retail mindset," said Radcliffe Cole of internet specialists Tryzens. "It also has a loud and proud brand presence. This identity has been developed specifically with their target audience in mind: teenage girls."

Extent of Co-op shambles laid bare by Lord Myners

Lord Myners said management standards at the Co-op were worse than at banks before the credit crunch. Photograph: Gary Calton for the Guardian

The shambolic state of the Co-operative Group was laid bare in a scathing verdict warning that the survival of Britain's biggest mutual organisation was at stake.

The Co-op has been undermined by "reckless" dealmaking, "shocking" levels of debt and governance standards far worse than even the banks before the credit crunch, according to Lord Myners, the group's senior independent director who was charged with overhauling the boardroom.

In an exclusive interview with the Guardian, the City grandee who was installed as a Labour minister at the height of the credit crisis said: "I have observed the bad governance of the banks, but this is on an altogether worse level.

"The rate of deterioration has increased over the last half dozen years because of the recklessness of the strategy being pursued and supported by the board."

He added that the entire retail, funeral home, pharmacy and farming conglomerate would deteriorate further unless it was radically reformed.

Myners, also an ex-chairman of Marks & Spencer and Guardian Media Group, said the Co-op's reputation as a business run democratically by its members was a myth.

He said the company's most senior managers were left to waste billions of pounds on disastrous corporate transactions because the directors drawn from the Co-op movement were not qualified to keep them in check. "Few of them have any serious business experience and many are drawing material financial benefits from their positions."

Myners said the Co-op's elected directors – who include a plasterer, lecturer, tax official, nurse and farmer – had overseen "breathtakingly value-destructive" deals, including the takeover of the Somerfield supermarket chain and the Britannia building society.

It was the Britannia deal that left the Co-op bank facing a £1.5bn financial black hole and resulted in the bank being taken over by US hedge funds.

Myners, called in to review the group's governance in December, proposed far-reaching changes that he said would ensure it could stay true to the Co-op's democratic ideals and still be run on commercial lines.

In a report rushed out – just days after the group's chief executive, Euan Sutherland, quit and branded the organisation "ungovernable" – Myners concluded that:

• The group's "massive failure of governance" had "gravely damaged the organisation", letting its business decay and leaving it financially weak.

• Its members, who supposedly own the business, have almost no say in what the board or managers decide.

• Unless the governance is reformed "it will run out of capital to support its business".

Myners said it was a tragedy that Sutherland had quit because the Co-op owed its survival through last year's bank crisis to him and his team. He said what he had uncovered at the Co-op was so serious that the group had no choice but to change.

"What I think I have exposed is that the Co-op is not a democratic organisation and has a deeply flawed governance structure, and if it doesn't address these issues the pace of decline will simply increase. The reality is that the Co-op has been in decline for 60 years."

The organisation had "the worst governance I have ever witnessed" and "shocking" levels of debt, some of which was hidden by complex property deals, he said. The group currently has debts of £1.2bn. "This is folly in the extreme. This really pains me."

He said that the group, led by £1.2m-a-year chief executive Peter Marks until last year, had been obsessed with making large acquisitions instead of competing in the cut-throat world of grocery retailing, which is its main business.

The crisis at the Co-op came to a head last week when Sutherland resigned, after just 10 months, when the Observer revealed his £3.6m pay package. Sutherland said that senior colleagues were determined to undermine him and he blamed them for a series of damaging leaks. Myners claimed Sutherland never intended to take the £2m of bonuses awarded on top of his £1.5m salary. The money was agreed before Myners became involved and, he said, should have been revealed earlier.

Britain's biggest mutual company was plunged into chaos last May when a £1.5bn financial hole was revealed at its banking arm. The capital shortage had forced the Co-op to abandon its bid for more than 600 Lloyds bank branches and has led to US hedge funds owning most of the bank.

The problems deepened in November when the bank's former chairman, Paul Flowers, was alleged to have bought class A drugs and used rent boys.

Myners said the Co-op had lost almost all the customers it picked up when it bought Somerfield in 2008 for £1.6bn. He said taking over the Britannia had almost bankrupted the Co-op bank and the attempted Lloyds deal, codenamed Project Verde, was misconceived: "Somerfield was reckless. Britannia was reckless. Verde was reckless."

Myners said he had worked four days a week for three months examining the group's "labyrinthine" structures and coming up with proposals. He will be paid £1 for his efforts.

The Flowers affair triggered a string of inquiries into the turmoil at the group, whose ethics and democratic structure had been lauded as an alternative to the big bonuses and ruthless business practices of City-controlled companies.

Myners said his proposals would make the group more democratic by involving its currently- ignored wider membership while making sure people with business experience were in charge of commercial decisions.

He faces opposition from within the group's senior ranks who accused Sutherland of trying to scrap the values established by the Rochdale pioneers who founded the group in 1844. But Myners argued even his most entrenched opponents now realised the status quo could not stand.

Myners said the group's directors had been paid hundreds of thousands of pounds in the last few years as the group was driven close to ruin.

"It depresses me. It's a controlled anger," he said.

He rejected claims he had alienated board members with his uncompromising verdict on their abilities and the Co-op's record.

He called for the replacement of the group's 20-strong elected board with a smaller board of six or seven non-executive directors with business experience and two executives from the group.

Members would be represented on a new National Membership Council to hold the board to the group's values and principles. Directors would be elected and reelected each year by all members, overhauling the current system which puts power in the hands of a few hundred activists

Non-discriminatory market access: Pakistan, India all but sign trade normalisation deal

India has accepted Pakistan’s demand to exclude 160 items – mainly textile products – from its Pakistan-specific Sensitive List. ILLUSTRATION: TALHA AHMED KHAN

ISLAMABAD: 

Pakistan and India are very close to clinching a deal on complete trade normalisation after New Delhi accepted Islamabad’s demand to remove textile products from its prohibitive list, an aide to Prime Minister Nawaz Sharif told The Express Tribune on Friday.

Both sides have reached a broader understanding on how to move forward on the issue of liberalising bilateral trade and overcome associated obstacles, said Miftah Ismail, special assistant to the prime minister and chairman of the Board of Investment.

Ismail is the first senior government official to speak at length about Pakistan-India trade talks, which have so far been held behind closed doors. He said both sides would simultaneously announce Non-Discriminatory Market Access on Reciprocal Basis (NDMARB) status for each other.

NDMARB was coined after the term Most-Favoured Nation (MFN) became controversial. The new term will grant India the same benefits as envisaged under MFN.

A special government panel chaired by Finance Minister Ishaq Dar has already decided to ask the federal cabinet to approve a fresh roadmap for granting NDMARB to India. A summary will be moved to the cabinet shortly and it is expected that both sides will notify changes by March 31, according to finance ministry officials.

According to Ismail, Pakistan will abolish the Negative List of 1,209 items which cannot be imported from India under the NDMARB agreement. Pakistan, in 2012, took a giant step by replacing the Positive List of 1,946 items, which could be imported from India, with the Negative List.

On the other hand, Ismail said that despite India’s claims that it had granted MFN status to Pakistan in 1996, New Delhi has so far not allowed Pakistan free market access. “There are restrictions on investment from and in Pakistan, for instance,” he said. “Until these restrictions are there, India cannot claim it has given Pakistan MFN status.”

Some of the items currently protected under the Negative List would subsequently be protected under the Sensitive List maintained under the South Asia Free Trade Agreement (SAFTA), Ismail said. According to him, automobiles and pharmaceuticals are two sectors which will be protected under the SAFTA Sensitive List, neutralising two lobbies against NDMARB status for India.

“As a nation we have sacrificed a lot while setting up the auto industry and we will protect it,” he said.

Meanwhile, India has accepted Pakistan’s demand to exclude 160 items – mainly textile products – from its Pakistan-specific Sensitive List, Ismail told The Express Tribune. India, he said, will also bring down the list from 614 items to 100 items.

As a first step towards NDMARB, Pakistan will allow India to import all goods through the Wagah-Attari border, Ismail said. The border would also remain open 24 hours a day, he added. According to him, the containerised movement of goods across the border will replace current labour-intensive practices.

Ismail said Pakistan has not compromised on anything while deciding to liberalise the trade regime with India. He said if India tried to create obstacles in the way of Pakistani goods, Islamabad would respond with the same intensity.

“Trade normalisation will triple the volume of Pakistani exports to India immediately,” Ismail said. He added that imports from India will substitute expensive machinery imports from Europe and West.

“In the end, it will be the consumers who will benefit from trade normalisation.

Industry feels threatened by imported, smuggled tyres

According to statistics, Pakistan imports four million tyres while 1.6 million are sold by local manufacturers. PHOTO: FILE

LAHORE: 

For those Pakistanis, who have their own vehicles, the influx of imported and smuggled tyres may provide a cheaper alternative, but for domestic manufacturers, the market of such tyres has reached such a scale that could severely hurt Pakistan’s industry.

Manufacturers insist that the domestic industry is feeling increasingly threatened by heavy imports of under-invoiced tyres, which are hindering the growth of their business. They believe no quality check is applied to the imported tyres, majority of which are substandard and can pose a threat to vehicles and passengers while driving at high velocity.

“It is estimated that due to under-invoicing of tyre imports, the government loses a minimum of Rs5 billion annually. This practice is increasing year by year. And the authorities are not doing anything to curb this,” said a leading tyre manufacturer but asked not to be named.

The country’s rubber industry has room to play host to three new units, but in such tricky conditions investors are hesitant to inject capital. An investment of around $300 to $400 million was needed to set up a complete unit, which could generate about 25,000 direct and indirect jobs besides giving millions of rupees in taxes, he said.

Cars, trucks, buses and light commercial vehicles running on roads in the country need 8.2 million radial tyres every year. According to statistics, Pakistan imports four million tyres while 1.6 million are sold by local manufacturers. The remaining 2.6 million are smuggled into the country.

According to the manufacturer, the locally produced tyres are in line with the best standards and cannot cause harm to vehicles and passengers while travelling.

Citing an example, he said 30 different tyre companies were working in India and catering to the domestic needs as Delhi did not allow imports in order to protect its industry.

He stressed that his company had the capacity to churn out 2.1 million tyres in a year, but could market only 1.6 million. “This comes despite the fact that our radial tyres are much better in quality than all foreign tyres brought into the country through under-invoicing and smuggling,” he said.

“We have been producing tyres for the last 50 years in collaboration with the fourth largest tyre producer in the world,” he said, adding the foreign principal had assisted the company in producing tyres that could withstand rough roads of Pakistan.

Besides losing Rs5 billion due to under-invoicing, the government is said to be bearing another revenue loss of Rs2.5 billion because of smuggling.

According to the manufacturer, around 200 to 225 trucks carrying smuggled goods including tyres cross into Pakistan from Afghanistan every day through the Chaman border. Each of these trucks usually carries goods worth Rs10-15 million.

To cope with under-invoicing, the local manufacturers have suggested a minimum increase of 50% in the import value of Chinese manufactured tyres and 40% in the value of tyres coming from other countries.

“If the authorities pay heed to the suggestion, government’s revenues could go up by almost Rs5 billion annually,” he argued.