Marriott International Inc said Friday that fewer than 383 million customer records were stolen in a massive cyberattack disclosed last month, down from its initial estimate that up to 500 million guests were affected.

The hotel operator also said that some 25.55 million passport numbers were stolen in the attack on the Starwood Hotels reservation system, 5.25 million of which were stored in plain text. Another 8.6 million encrypted payment cards were also taken in the attack, it said.

Marriott previously confirmed that passport numbers and payment cards were taken, but not said how many.

The company disclosed on Nov. 30 that it had discovered its Starwood hotels reservation database had been hacked over a four-year period in one of the largest breaches in history.

At least five U.S. states and the UK’s Information Commissioner’s Office are investigating the attack.

Marriott also said that it had completed an effort to phase out the Starwood reservations database that it acquired in September 2016 with its $13.6 billion purchase of Starwood. The hack began in 2014, a year before Marriott offered to buy Starwood.
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It sounds like a Hollywood caper: A group of investors and officials convince European banks to loan a total of $2 billion to a resource-rich African nation trying to rebuild after a bruising civil war.  

The money promptly disappears, and then this caper turns tragic.  The government doesn’t learn of the loans until three years after they happen. It defaults on the loans, and that triggers an economic crisis: the currency tumbles, prices rise, hospitals run out of basic supplies and key roads go unrepaired.  Thousands of people contract cholera – an easily preventable and treatable illness that is often caused by a breakdown of health services.

This isn’t Hollywood. This, allegedly, is Mozambique, according to an indictment that has resulted in the arrests of at least four figures in recent days, including a former finance minister.  The men are now awaiting extradition to the U.S. for their role in defrauding U.S. investors when seeking the loans.

VOA obtained a redacted copy of the indictment, issued by the U.S. District Court’s Eastern District of New York.  It accuses the four, plus another man who has not been arrested and two others who were not named, of “creat(ing) the maritime projects as fronts to raise money to enrich themselves and intentionally divert(ing) portions of the loan proceeds to pay at least $200 million in bribes and kickbacks to themselves, Mozambican government officials and others.”

Last week, South African officials arrested Mozambique’s former finance minister, Manuel Chang, on an Interpol warrant as he transited through the country.  

This, says analyst Alex Vines of the Chatham House think tank, is a very big deal. This matter has been investigated by both an independent firm and also by the British government, and until now, nothing has come of it.

“So it looked as if nothing would happen about these many millions, probably billions, of U.S. dollars that were (un)accounted for,” Vines told VOA. “So the indictment that has occurred from the U.S. District Court, Eastern District of New York, for key characters involved in this loan scandal, is very very significant and is a game-changer, I think.”

The reaction: Public vs Party?

That’s certainly the case in Mozambique, where commentator Fernando Lima notes the public has largely applauded the arrests, while the ruling Frelimo party has been silent.

“There is a sentiment of huge enthusiasm and joy, which causes a lot of irritation on the other side, meaning people related to the Frelimo party,” he told VOA  “…It caused this huge, huge embarrassment for the current government. And up to now, which is also very, very surprising, no Mozambican authorities have said anything related to the arrest of Mr. Chang. Neither the government, neither Frelimo party, neither the attorney general’s office, or our parliament.”

Vines says it’s unclear how President Filipe Nyusi – who was defense minister at the time of the secret loans – will come out of this scandal, but he says there may be a bright side for investors who are eager to put money into the nation, which will start exporting natural gas in 2023.

“The International Monetary Fund, IMF, and bilateral donors to Mozambique had suspended lending to Mozambique, or direct government lending, should I say,” he said. “They do want to move on, and so again, I think this might help clear things up so that longer term, the relationship of Mozambique with some of its international creditors and international partners can be improved.”

Rudi Krause, the South African lawyer representing the former finance minister, Manuel Chang, says they’ll fight the U.S. extradition request.

Krause said attorneys had not been given a full copy of the indictment by South African officials at the time of Chang’s arrest and so could not comment on the allegations.

VOA was unable to reach Krause after receiving the U.S. copy of the indictment, for further comment.

Chang will appear in a South African court on January 8. But the court of public opinion will also have its chance to weigh in, when Mozambique goes to the polls in October.

 
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Asian markets Friday continued the global sell-off triggered by Apple’s warning of lower revenues and futures indicators predict a sharply lower opening for U.S. markets.

The Tokyo market dropped 3 percent in morning trading, and markets in Shanghai, Sydney, Seoul and Taipei were also down.

Stock markets across the globe dropped Thursday after tech giant Apple said sales of its devices had fallen sharply in China last month, perhaps signaling a broader slowing in the world economy.

Apple has blamed U.S. President Donald Trump’s trade dispute with China for its shrinking outlook, but the U.S. leader tweeted his defense Thursday, claiming, “The United States Treasury has taken in MANY billions of dollars from the Tariffs we are charging China and other countries that have not treated us fairly. In the meantime we are doing well in various Trade Negotiations currently going on. At some point this had to be done!”

US-China trade talks

On Friday China’s government said a U.S. trade delegation will visit Beijing next week for two days of talks on carrying out an agreement reached by Trump and Chinese President Xi Jinping to postpone new tariff hikes.

On Dec. 1 the two leaders agreed to complete talks about technology, intellectual property and cyber theft issues within 90 days, and hold off on new tariffs in the meantime. U.S. officials have said that if the talks fail to produce a satisfactory agreement Washington will increase tariffs on $200 billion of Chinese goods from 10 percent to 25 percent.

Apple chief executive Tim Cook blamed the company’s sales shortfall on the trade battle President Donald Trump is waging against China.

“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Cook wrote.

Not just Apple

Kevin Hassett, chairman of the White House Council of Economic Advisers, said the contentious U.S.-China relations will force other U.S. companies to cut their sales estimates in China.

“It’s not going to be just Apple,” Hassett told CNN. “There are a heck of a lot of U.S. companies that have sales in China that are going to be watching their earnings being downgraded next year until we get a deal with China.”

He said slowing consumer demand in China gives Trump an edge in ongoing trade negotiations.

“That puts a lot of pressure on China to make a deal,” he said. “If we have a successful negotiation with China then Apple’s sales and everybody else’s sales will recover.”

The U.S. economy remains strong, with the country’s 3.7 percent jobless rate at a nearly five-decade low. But economists say the U.S. economy could be slowing and uncertainty in global economic fortunes has led to volatile daily swings in stock indexes in recent weeks.

In 2018, U.S. stock indexes suffered their worst year in a decade, with most of the losses recorded in December. The Dow was off 5.6 percent for the year, with the broader Standard & Poor’s index of 500 stocks down 6.2 percent.
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Herb Kelleher, who changed the airline industry by helping create and lead Southwest Airlines, a low-fare carrier that made air travel more accessible to the masses, has died. He was 87. 

Southwest confirmed that Kelleher died Thursday. 

Kelleher was a lawyer in San Antonio when a client came to him in the late 1960s with the idea for a low-fare airline that would fly between big cities in Texas. Today, Southwest carries more passengers within the United States than any other airline. 

At a time when many other airlines were run by colorless finance wizards, Kelleher boasted about drinking whiskey and showed a gift for wacky marketing ploys.  
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Three former Credit Suisse Group AG bankers were arrested in London on Thursday on U.S. charges that they took part in a $2 billion fraud scheme involving state-owned companies in Mozambique, a spokesman for U.S. prosecutors said.

Andrew Pearse, Surjan Singh and Detelina Subeva were charged in an indictment in Brooklyn, New York federal court with conspiring to violate U.S. anti-bribery law and to commit money laundering and securities fraud, according to spokesman John Marzulli. They have been released on bail.

The arrests came five days after former Mozambique finance minister Manuel Chang was arrested in South Africa as part of the same criminal case, which was brought by federal prosecutors in Brooklyn.

The prosecutors will seek to have all of the defendants extradited to the United States, according to Marzulli. Lawyers for the defendants could not immediately be reached for comment after business hours in New York and London.

“The indictment alleges that the former employees worked to defeat the bank’s internal controls, acted out of a motive of personal profit, and sought to hide these activities from the bank,” Credit Suisse said in a statement. It added that the bank will continue to cooperate with authorities.

Chang oversaw Mozambique’s finances when it failed to disclose government guarantees for $2 billion in international borrowing by state-owned firms. The disclosure of those loans in 2016 plunged the southern African country into a suffocating debt crisis it is still struggling to climb out of two years later.
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A federal judge says a New York City law forcing Airbnb and HomeAway home-sharing platforms to reveal detailed information about its business seems unconstitutional.

Judge Paul Engelmayer on Thursday blocked the law from taking effect on Feb. 2, finding there’s a greater than 50 percent chance the companies would prevail on claims that the law violates the Fourth Amendment right to be free from unreasonable searches and seizures.

The ruling comes at an early stage of the litigation. Lawyers for the city and the companies will gather additional evidence before Engelmayer makes a final ruling.

The city did not immediately comment.

The San Francisco-based Airbnb in a statement called the ruling a “huge win.”

The law was passed last summer.

 
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Tesla made about 9,300 more vehicles than it delivered last year, raising concerns among industry analysts that inventory is growing as demand for the company’s electric cars may be starting to wane.

If demand falls, they say, the company will enter a new phase of its business. Like other automakers, Tesla will have to either cut production or reduce prices to raise sales. A drop in demand could also curtail the company’s earnings and jeopardize CEO Elon Musk’s promise to post sustained quarterly profits.

On Wednesday, Tesla did cut prices, knocking $2,000 off each of its three models. The company said the cuts will help customers deal with the loss of a $7,500 federal tax credit, which was reduced to $3,750 this month for Tesla buyers and will gradually go to zero by the end of 2019.

“They have for a long time had more demand than supply,” Gartner analyst Michael Ramsey said. “It’s becoming apparent that that dynamic is changing.”

Tesla reported that it produced 254,530 cars and SUVs last year and delivered 245,240.

The company’s deliveries for the full year matched Wall Street estimates, but its figures for the fourth quarter didn’t reach expectations. Tesla said it delivered 90,700 vehicles from October through December. Analysts polled by data provider FactSet expected 92,000.

Jeff Schuster, a senior vice president at the forecasting firm LMC Automotive, said demand for Tesla’s lower-priced Model 3 has been artificially high for the past six months as the company overcame production problems at its Fremont, California, factory.

“You’ve had these inflated months because of delayed deliveries,” Schuster said. “We’re probably getting to that point where we’re getting to equilibrium and consumers aren’t necessarily waiting for vehicles.”

Last year, Tesla reported that about 420,000 buyers had put down $1,000 deposits to join the Model 3 waiting list.

LMC predicts that Tesla U.S. sales will rise in 2019 because it’s the first full year on the market for the Model 3. It anticipates sales to then fall by about 10,000 in 2020.

Losing the tax credit will hit those who have been holding out for the $35,000 version of the Model 3, Schuster said. At present, Tesla is selling only versions that cost at least $44,000. Under federal law, buyers get the full tax credit until a manufacturer reaches 200,000 in sales since the start of 2010. Tesla hit 200,000 in July but the full credit continued for vehicles delivered by Dec. 31. It was cut in half on Jan. 1 and will go away by the end of the year.

“You’ve had your early adopters, those early followers have already come in” to buy, Schuster said. “Now you’re trying to appeal to the mainstream market. I think that will have an impact on overall demand.”

At the same time, inventory appears to be rising. The company parked hundreds of cars at lots and Tesla stores all over the country at the end of last year, which could indicate excess stock. Tesla wouldn’t give inventory numbers but said it has lower stocks than its two biggest competitors, BMW and Mercedes.

The Associated Press found one lot on the north side of Chicago where Tesla was storing dozens of vehicles in late December, and Mark Spiegel, a hedge fund manager who bets against Tesla stock, said other lots were full across the country.

Tesla said it sometimes stores vehicles on lots as they’re being shipped to company dealerships across the nation. The lot in Chicago has fewer cars on it now, the company said. “Our inventory levels remain the smallest in the automotive industry,” the company said Wednesday.

Tesla also says Model 3 sales should grow worldwide as it expands distribution and begins to offer leases. Deliveries in Europe and China will start in February, and a right-hand-drive version is coming later in the year, the company said.

In addition, inventory dropped in the fourth quarter as Tesla “delivered a few thousand vehicles more than produced.”

Tesla said it had about 3,000 vehicles in transit to customers at year’s end. But even with that number, Schuster said production still exceeded deliveries, which doesn’t fit Tesla’s business model of building cars when they are ordered by customers. Still, even at 9,300, Tesla’s inventory is smaller than other automakers that have to stock dealerships, Schuster said.
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