Ericsson says new US fines probably over Iraq corruption

Swedish telecoms equipment massive Ericsson stated Thursday it’s going to in all likelihood need to pay new fines to the USA Department of Justice over suspected bribes to the Islamic State group in Iraq.

Chief govt Borje Ekholm conceded in a newspaper interview in February that a number of Ericsson personnel might also have bribed IS individuals for street transport via regions managed through the organization in Iraq.

The admission was made before the publication of a report by the International Consortium of Investigative Journalists (ICIJ) revealing that an internal Ericsson investigation from 2019 was never made public.

The internal probe had identified possible corruption between 2011 and 2019 in the group’s Iraqi operations.

In the company’s quarterly earnings statement on Thursday, Ekholm said Ericsson was “fully committed to cooperating” with the US Department of Justice.

“The resolution of these matters could result in a range of actions by DOJ, and may likely include additional monetary payments, the magnitude of which cannot at this time be reliably estimated,” he said.

Following the announcement, shares in the telecom giant tumbled over six percent in the early hours of trading on the Stockholm stock exchange.

The Swedish firm’s shares have lost almost a quarter of their value since mid-February.

Ericsson already agreed to pay $1 billion in penalties to US authorities to close corruption cases in Djibouti, China, Vietnam, Indonesia and Kuwait in 2019.

Ekholm said in Thursday’s statement that the company was “limited in what we can say” about the events in Iraq, but he said in March that it was “a very serious matter, and involves embarrassing and unacceptable conduct in the past”.

At the Ericsson’s annual meeting in late March, shareholders voted against discharging Ekholm and the board from liabilities, a normally routine decision.

Both Ekholm and board members were nonetheless re-elected to their positions.

In its income declaration, Ericsson mentioned that internet income fell 8 percentage to two.9 billion Swedish kronor (280 million euros, $307 million).

The business enterprise had announced on Monday that it’d set apart provisions of 900 million kronor to cowl the monetary hit from its suspension of sports in Russia following Moscow’s invasion of Ukraine.

Ericsson’s first-sector sales beat expectations however its working profit of four.7 billion kronor turned into underneath an estimate via analysts surveyed by means of Bloomberg News.