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Swedish Newspaper Reports Ericson Faces US Corruption Probe


06/17/2016


Swedish Newspaper Reports Ericson Faces US Corruption Probe
Corruption that is related to the business of Swedish mobile telecom gear maker Ericsson has induced an investigation from the US authorities. This was reported by Swedish daily Svenska Dagbladet (SvD) late on Thursday and the report cited unnamed sources with knowledge about the issue.
 
Ericsson, whose shares are listed in Stockholm as well as on Nasdaq, is being investigated by the U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DOJ), said the SvD on its website.
 
Apart from clarifying that Ericson was cooperating with U.S. authorities to answer questions over its operations it had received in March 2013, the company spokesperson refrained from making any more comments when it was contacted over e-mail by Reuters to know the company side of the issue.
 
"As a listed company, we always follow the requirements to publicly disclose any information about events that would have a material impact on the company or its finances," the spokesperson said.
 
The spokesperson however clarified that the company had given clarifications to the media way back in 2013 that Ericson had received a request for information from U.S. authorities. At that time in 2013, media reports about the business dealings and practices of Ericson in Romania that were being investigated by the U.S. authorities were published. There were however no mention of the company’s Chinese business process and practices investigation. 
 
A  SEC spokespeople did not immediately return a request for comment outside regular business hours and the DOJ declined to comment on the Svenska Dagbladet report.
 
Hefty fines for companies under the Foreign Corrupt Practices Act could be a result of the findings of corruption by U.S. authorities probing matters of Ericson. A $795 million fine to settle U.S. and Dutch investigations into a bribery scheme in Uzbekistan was agreed upon to be paid by the mobile operator Vimpelcom in February. Roughly half of that amount was agreed to be paid to U.S. authorities.
 
In breach of company policy, there are reports of an alleged business interest in a supplier to Ericsson by a former Ericsson executive in Asia as reported by the new report in Svenska Dagbladet website. However the report did not make it clear whether this was included in or was in any way a part of the investigations.
 
The paper also added that some business deals made by Ericsson's business unit Microwave Systems which was divested in 2006 had caught the attention of the SEC. 
 
(Source:www.reuters.com)