Colt Technology UK has won a High Court injunction preventing an Italian company allegedly suspected of being involved in a VAT carousel fraud from issuing a winding-up order over an unpaid – and hotly disputed – £3.8m debt.
After Colt’s UK auditors PricewaterhouseCoopers (PwC) “raised concerns” over SG Global Group’s business activities, Colt and SGG ended up at legal loggerheads. SGG had evidently threatened to issue a winding-up petition that would have caused serious headaches for Colt unless the British not-quite-a-telco coughed up millions in unpaid invoices.
Colt, however, claimed in court to have a good reason for not paying: its auditors had discovered that SGG looked like it could be a vehicle for tax fraud. So it applied for an injunction to prevent SGG issuing the petition on the grounds that it would be an abuse of legal process.
Until PwC raised the alarm, a VoIP interconnect contract between Colt Italy (a subsidiary of Colt UK) and SGG for comms traffic to and from Italy and Africa had been running smoothly since 2016. SGG received around €40m (£35.5m) from Colt – until PwC began sniffing around, and the court heard evidence about SGG’s unconventional structure.
SGG’s current sole director and shareholder, Jamie Johnston, bought the company for just €100 in 2017. The court also heard that SGG’s margin on its VoIP services which were resold from a third party, New Energy Corporation Srl, were “between 0.27 per cent and 0.35 per cent.”
“I agree with Colt UK that the picture which Mr Johnston paints of the financial health and activity of SGG sits uncomfortably with the sale of the shares in SGG from [previous sole shareholder] Mr Biscaioli to Mr Johnston for the low, if not nominal, price of €100,” said deputy High Court judge Joanne Wicks QC in her judgment, presiding over Colt’s application hearing.
Alarmed by PwC’s flagging of “anomalies” including “the absence of corporate filings”, Colt managers began to wonder if SGG “was not the true supplier of the services under the Agreement, but was a shell company acting as a front for another supplier and was engaged in a form of VAT ‘missing trader’ fraud,” as the judge summarised it. On 2 March 2017 Colt UK wrote to SGG saying it had “serious doubts that SG is trading in its own right, and in accordance with all applicable laws.”
VAT carousel fraud explained
Europol, the EU police force, explains VAT carousel fraud as follows: “More complex cases of VAT fraud are typically known as carousel frauds. As part of these fraud schemes, goods are imported and sold through a series of companies before being exported again. The first company in the domestic chain charges VAT to a customer, but does not pay this to the government, becoming what is known as a ‘missing trader’. The exporters of these goods claim and receive the reimbursement of VAT payments that never occurred.”
Colt Italy stopped paying SGG’s invoices on the grounds it would commit a crime under Italian law by giving cash to suspected criminals. Unimpressed, and denying illegal behaviour, in 2017 the Italian firm sued Colt in Milan – and the following January it served a statutory demand against Colt UK, Colt Italy’s parent company, for £4.1m including interest. After Colt UK tried and failed to have itself ruled out of the Italian proceedings, SGG doubled down with a second statutory demand in the UK in December 2019.
Alarmed by the way things were heading, Colt asked London’s High Court to grant an injunction preventing SGG from serving a winding-up petition. Such a petition would not only force Colt to pay the disputed invoices but would more or less erect a giant neon sign over its UK HQ saying “financial trouble here”, whether or not that was true.
Both sides’ lawyers, arguing over Colt’s application in front of Judge Wicks, highlighted a previous High Court judgment about winding-up petitions. That judgment included the sentence: “It is an abuse of process to present a winding-up petition against a company as a means of putting pressure on it to pay a debt where there is a bona fide dispute as to whether that money is owed.”
Colt then successfully invoked a legal precedent called the Ralli Bros principle, which says that English courts will not uphold contracts where performance of the contract would result in a crime being committed abroad.
“I consider that Colt UK has a properly arguable illegality defence to the sums claimed by SGG,” concluded Judge Wicks, who added: “The reason why Colt UK has not paid SGG’s debt is because that debt is disputed, not because it cannot do so.”
Nothing in the judgment indicated how Colt Italy had managed to sign such a large contract with SGG in the first place without noticing its ownership structure through routine due diligence.
The Italian proceedings against Colt are continuing in that country’s appeal courts. ®
Oracle aims high-end cloudy database release at existing customers in ‘defensive’ move
Oracle has brought out a new Exadata Cloud Service based on the Exadata X8M platform, bringing its high-end persistent memory feature to the cloud. Well, Oracle’s cloud at least.
The transactional and analytics database system Exadata X8M was first released last year in a launch Oracle claimed would reduce IO latency by up to 10 times with its use of persistent memory and remote direct memory access (RDMA) over Ethernet.
Bringing the system to the Exadata Cloud Service makes it available on a consumption basis in the Oracle cloud, including 26 global cloud regions and its on-prem service, Cloud@Customer. The omnipresent enterprise computing biz claimed it could help run applications needing multiple workloads and data types in a single converged Oracle Database, avoiding integration of multiple different database services.
Oracle claimed this meant 2.5 times higher transaction processing IOs, and 10 times better IO latency than its previous Exadata Cloud Service release.
The Exadata Database Machine started life in 2008 as an in-memory database appliance that supports OLTP (transactional) and OLAP (analytical) database systems. It was the result of a collaborative project between Big Red and HP (as it was then known), but was later ported to Sun hardware. A version has been available on Oracle Cloud since 2015.
David Floyer, CTO at Wikibon, said that with IO latency of around 20 microseconds and a 25 PB data warehouse available, Wikibon assessed it as the “highest-performance cloud database service available.”
Regardless of its performance, part of the positioning is to boost Oracle in the cloud market, as it was with the Zoom deal earlier this year, said Philip Carnelley, associate vice president of software research at IDC.
It would suit Oracle’s existing customers who want options in the cloud, he added.
“If you’ve already got loads of Oracle everywhere, then it’s becoming more viable to move what you want into the cloud: that’s their big thrust. There is such a huge install base of Oracle, it’s offering them everything in the cloud, on prem, or wherever they want it. From Oracle’s point of view, it could be seen as defensive. This will appeal to very large organisations with a very large investment in Oracle,” he said.
Carnelley said businesses were looking to move to the cloud as soon as possible, while at the same time IT departments would be reluctant to abandon their existing investments. “If it ain’t broke, don’t fix it: you don’t want to change too many things and fewer things you have to change, the better,” he said.
But outside Oracle’s install base, the appeal becomes less certain. In transaction systems Oracle would go up against IBM’s Db2 and SAP’s in-memory HANA database, both of which are available on the public cloud from the usual suspects.
On the analytical systems, Oracle must compete with cloud-native data warehouses such as Snowflake, AWS’s Redshift, Google’s BigQuery and Microsoft’s Synapse. ®
OpenStack’s 10th birthday is next week, but you get the present of a new release today!
On October 21st, 2010, something new hit the world of enterprise infrastructure software: it was free software called OpenStack “Austin” and comprised the Nova VM-wrangler and the Swift Object store.
Enthusiasm for OpenStack has waxed and waned since. In its early years the project’s openness saw the likes of Cisco, Rackspace and HPE tout it as a better alternative than proprietary clouds from AWS Microsoft.
We know how that turned out: AWS, Azure and Google dominate the cloud and while OpenStack runs plenty of colossal web companies, the project’s own user surveys suggest that the majority of deployments are at organisations with between 100 and 10,000 employees.
China turned out to be a big part of the OpenStack story: its web giants Baidu and Tencent are known users, while the nation’s big three telcos – China Mobile, China Telecom and China Unicom – also adopted the stack. They’ve adopted it because OpenStack now offers over 40 modules that are collectively capable of doing just about anything a cloudy or webscale stack requires.
The Register will properly assess OpenStack’s first decade soon, but for now we need to consider the project’s 22nd major release, dubbed “Victoria”, which landed earlier this week.
The new release includes over 20,000 code changes by 794 developers from 160 different organisations and over 45 countries.
The OpenStack Foundation rates improved Kubernetes support, including support for containerised network functions, as among its most important new additions. More FPGA support has been added, specifically for Intel and Inspur accelerators, just in time for the SmartNIC craze to crest. And because too much security is seldom enough, the Octavia module now supports HTTP/2 over TLS using Application Layer Protocol Negotiation (ALPN).
The Ironic module, dedicated to provisioning bare metal servers, has a new communications flow for agent tokens that should make it safer to communicate with devices on the edge. Ironic had a 66% increase in activity compared to the OpenStack Ussuri cycle, and added more security for edge deployments by combining the communication flow for agent token which was added in Ussuri with the automatic agent TLS feature. Now, malicious attackers are unable to possibly intercept the “token” and through standard communication exchanges with the Ironic services. The Foundation also highlighted the following enhancements for “complex networking issues”:
- The SDN module Neutron now provides metadata service over IPv6 and has added support for flat networks for Distributed Virtual Routers (DVR), Floating IP port forwarding for the OVN backend, and router availability zones in OVN.
- Load-balancing module Octavia now support version two of the PROXY protocol.
- Container networking module Kuryr has added support for autodetection of VM bridging interface in nested setups.
OpenStack has published a full list of enhancements present in Victoria here. The next OpenStack release has been named “Wallaby” and should hop into view in April 2021. The release’s timeline and goals can be found here. ®
Your web browser running remotely in Cloudflare’s cloud. That’s it. That’s the story
Network services giant Cloudflare wants to host your web browser in the cloud so it can send you only safe content.
On Thursday, the biz invited customers to sign up for the beta release of its Browser Isolation service, a third component in its evolving Cloudflare for Teams offering that came from S2 Systems, a Kirkland, Washington-based startup acquired earlier this year.
Browser isolation generally involves running a headless web browser – the browser foundation without its graphic interface – on a remote server, now commonly referred to as “the cloud,” and then buffering its visual output in some kind of format to send to software on the user’s computer to display. Scrubbing the web content of bad stuff before it’s rendered is a possibility, too, and that’s what Cloudflare’s Browser Isolation appears to do.
There are also client-side variations like Apozy’s Native Browser Isolation, and HP-acquired Bromium (now HP Sure Click), which relies on running browser tasks inside a hardware-isolated micro virtual machine.
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Browser quarantine regimes have won corporate fans as a way to mitigate web-based security threats, and also to manage how workers interact with the unwholesome web. Think of web content as a package containing a bomb; if it explodes, you’ll wish you opened it in a concrete, reinforced bunker so that adjacent bunkers and buildings aren’t taken out. That’s browser isolation: containing any malicious stuff that spills into and out of the browser on your employees’ PCs.
Companies playing in the browser isolation market like Authentic8, Broadcom (Symantec), Menlo Security, and Webgap, among others, generally point to business-justifying stats compiled by consultancies.
Cloudflare, for instance, cites Gartner’s 2018 claim that web browsers are the source of 70 per cent of endpoint compromises. The IT research firm, declaring the public internet “a cesspool of attacks,” also projected that by 2022, 25 per cent of enterprises will adopt browser isolation technology for high-risk users and specific use-cases, up from one per cent in 2017.
Tim Obezuk, principal solutions engineer at Cloudflare, contends that Cloudflare Browser Isolation has an advantage over other approaches that rely on pixel pushing or DOM reconstruction. The former involves streaming rendered screen pixels to a remote user (slow) or loading pages remotely, checking them, then repacking and relaying them to a remote client (misses threats and prone to errors).
“Instead of streaming pixels to the user, Cloudflare Browser Isolation sends the final output of a browser’s web page rendering,” said Obezuk in a blog post. “The approach means that the only thing ever sent to the device is a package of draw commands to render the webpage, which also makes Cloudflare Browser Isolation compatible with any HTML5 compliant browser.”
Cloudflare Browser Isolation relies on Network Vector Rendering (NVR) technology from its S2 Systems acquisition. This intercepts the draw commands directed at the the remote Chromium browser’s Skia graphics rendering layer, then encodes, compressed, and encrypts them in a highly compact form before sending them to the remote client browser – which can be any HTML5-compliant browser (e.g. Chrome, Edge, Firefox, Safari).
Using an NVR WebAssembly library with an embedded Skia library that has been pushed to the local web browser, the transmitted draw commands can be unpacked, decrypted, and replayed with speed that approaches native device code.
It’s an approach that looks like it could work well given Cloudflare’s edge-centric network – with more than 200 data centers around the globe, latency between the user and the Cloudflare Browser Isolation host is likely to be less than it would be for a service operating under a more centralized network architecture.
We asked Cloudflare if browser add-ons will fit into its isolation approach, and a spokesperson told us:
If hosted browsers of this sort catch on, it may be time to stop referring to them as “user-agents” and call them something more accurate like “admin-agents.” ®
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