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Multiple billion bang for Ericsson in bribe investigation

2019-09-26T06:56:33.183Z

Ericsson allocates SEK 12 billion for expected fines and other costs in a bribery investigation in the United States, according to a press release. The expenditure will be a substantial cut for the result this quarter.



It is already known that the telecom giant is negotiating with the Department of Justice (DOJ) and the Financial Supervisory Authority (SEC) for a settlement of violations of US corruption laws, crimes that have, however, occurred in other countries. But it is only now that the conceivable sums clear.

President Börje Ekholm calls the case a "historical problem area".

"We must accept that the company has failed in the past and I can assure that we work hard every day to build a stronger Ericsson, where ethics and regulatory compliance form the cornerstones of how we conduct our business," he comments in the press release.

Background: Business in China

It was the SEC (Securities and Exchange Commission) that initiated the investigation in 2013, on the grounds of suspected violations of the United States Foreign Corrupt Practices Act (FCPA).

The crimes must have taken place in connection with the telecommunications company's business in China, Djibouti, Indonesia, Kuwait, Saudi Arabia and Vietnam. Ericsson is accused of, among other things, having paid bribes in a business context.

"Now we can see that we will probably receive sanctions," Börje Ekholm said last year.

Stunning deals

And now the company specifies that it fears a fine of $ 1 billion (SEK 10 billion). So, with surrounding costs included, Ericsson estimates that it is equally good to set aside SEK 12 billion.

By comparison, the telecom company made an operating profit of SEK 3.2 billion this quarter last year.

Ericsson's press department did not want to say anything more during the night, but refers to a telephone conference that Ekholm and others from Ericsson's management will hold at 9 Swedish time.

The US Financial Supervisory Authority SEC is usually able to pressure companies into staggering settlements. The following year, Telia agreed to pay multibillion amounts after mosquito deals in Uzbekistan. The SEC also has a leading role in "dieselgate", the gigantic and still ongoing tavern where Volkswagen and other car giants have been revealed with long-standing exhaust cheating.

Source: svt

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