Ericsson shares fall 9% on Iraq corruption probe – report

Ericsson logo is seen at its headquarters in Stockholm, Sweden June 14, 2018. (Reuters photo)

SULAIMANI (ESTA) — Ericsson said on Wednesday its shares had fallen 9% after the Swedish telecom gear maker disclosed results of an internal investigation that detailed suspect payments and misconduct in Iraq.

Reuters reported that the company’s investigation had identified payments made to use alternate transport routes in connection with circumventing Iraqi Customs, at a time when militant organizations controlled some transport routes.

The probe, which was triggered by unusual expense claims in Iraq dating back to 2018, finished a year later but the company chosen not to disclose it at that time.

The company said as a result of the investigation several employees had left the company.

Ericsson CEO told Reuters Börje Ekholm said in an interview with Reuters that the investigation closed in 2019 the company did not find it material enough to disclose the findings.

“The materiality of our findings did not pass our threshold to make a disclosure,” Reuters quoted Ekholm as saying. “That was our judgment when we completed the investigation two years ago.”

The company revisited its stance after enquiries about the probe from media outlets, including from the International Consortium of Investigative Jounrnalists (ICIJ).

“At any point in time, there are multiple investigations taking place,” Ekholm said. “There are some who want to take advantage of the system. So the key is to have in place a compliance system that uncovers them very quickly, and that we can take swift remediation actions on those.”

In 2019, Ericsson had agreed with the U.S. Department of Justice (DoJ) to pay more than $1 billion to resolve a different series of probes into corruption, including the bribing of government officials that took place over many years in countries including China, Vietnam and Djibouti.

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