The worm uses a known security vulnerability that is in Outlook Express. Once the user receives an infected email message and opens or views the message in the preview pane, the worm creates a file "kak.hta" to the Windows Startup directory.
Next time the system is restarted, the worm activates. It replaces "c:\autoexec.bat" with a batch file that deletes the worm from the Startup directory. The original "autoexec.bat" is copied to "C:\AE.KAK".
Also, It modifies the message signature settings of Outlook Express 5.0 by replacing the current signature with an infected file, "C:\Windows\kak.htm".
Therefore every message sent with Outlook Express will contain the worm after this has been done.
Then it modifies the Windows registry in such a way that it will be executed in every system startup. The key it adds to the registry is:
The .hta file that the virus creates and executes in the future is saved to Windows System directory. On the first day of each month, if the number of hours is more than 17 (i.e. 6pm or later), the worm will show an alert box with the following text:
Kagou-Anit-Kro$oft say not today!
Then the worm shuts down Windows.
F-Secure Anti-Virus detects the worm. When the worm has been detected, the user should delete the following files, if they exist:
where (filename) is a variable, and it changes from one system to another
The "autoexec.bat" file can be restored by renaming "C:\AE.KAK" to "C:\autoexec.bat".
Kak uses a known security hole in Microsoft Outlook Express to create the local HTA file.
If active scripting is disabled from Outlook Express, the worm will not work.
Microsoft has more information on this problem available at: https://www.microsoft.com/technet/security/bulletin/fq99-032.asp
They also have a patch to fix this problem at: https://www.microsoft.com/technet/security/bulletin/ms99-032.asp