The admission could bring new problems for the group, including in the United States.
(Photo: Bloomberg/Getty Images)
Stockholm The network supplier Ericsson has admitted possible bribe payments in Iraq. An internal investigation into unusual payments going back to 2018 has raised concerns about doing business in Iraq, the Swedish company said on Tuesday evening. On the stock exchange, the Ericsson papers fell by 14.5 percent at times on Wednesday.
The investigations, which covered the years 2011 to 2019, found indications of possible corruption, such as money orders with no known recipient and payments to a supplier without a clearly defined scope of services. Payments were also made to middlemen and alternative transport routes were chosen, for example to avoid Iraqi customs.
According to the group, some routes were said to have been controlled by terrorist organizations such as the Islamic State (IS) at the time. However, the auditors have not been able to find out who ultimately received the payments. Transactions and payments that posed a potential money laundering risk were also uncovered.
In response to the investigations, several employees were fired and disciplinary proceedings were ordered. Business relationships with previous partners have also been dissolved. According to the company, the investigations had not revealed any evidence of direct financing of the terror network by Ericsson employees. CEO Börje Ekholm confirmed the news in an interview with Swedish newspaper Dagens Industri.
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The admission could bring new problems for the group, including in the United States. Ericsson had already paid a good one billion dollars there in 2019 after corruption investigations. At that time, the focus was on business in China, Indonesia, Vietnam and Kuwait, among other things. Ericsson also had to agree to provide certain documents and information at the time – and the US Department of Justice concluded last October that the company had violated this obligation.
Alongside Nokia, Ericsson is one of the two major network equipment suppliers on which mobile operators in the western world depend, particularly after Chinese competitor Huawei lost ground amid political concerns.
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