Telecoms giant Ericsson targeted by a survey of American stock market gendarme for suspicions of corruption

An internal survey identified in 2019 facts of possible corruption in the group’s activities in Iraq in the previous eight years. Also mentioned suspicious payments to the Islamic State group.

Le Monde with AFP

The Swedish telecom giant Ericsson announced on Thursday June 10, being targeted by an investigation by the American stock market gendarme concerning suspicions of corruption in Iraq, which already exposes it to new fines from justice American.

The American financial market regulatory authority, the SEC, informed Ericsson “of the opening of an investigation concerning the facts described in the company report on Iraq in 2019,” said the Swedish group in a press release.

“It is too early to determine or predict the outcome of this investigation, but Ericsson cooperates fully with the dry,” he wrote. Ericsson does not give more details on the substance of the stock market investigation, but several shareholders of the Swedish group criticized him for having lacked transparency towards the markets.

survey of Swedish justice for bribes at IS

At the beginning of the year, the revelation of this corruption case in Iraq had led to a brutal fall, of the order of 30 %, of the Swedish flagship course, without raising since. In mid-April, Ericsson had deemed “probable” new fines pronounced by the US Ministry of Justice, whose universal jurisdiction in many areas allows him to prosecute foreign groups.

The case had broken out in February, upstream of the publication of a vast press investigation coordinated by the International Consortium of Investigation Journalists (ICIJ), to which Le Monde had contributed. This forced Ericsson to make public the conclusions of an internal investigation dating from 2019, identifying facts of possible corruption in the group’s Iraqi activities during the previous eight years.

The internal survey evokes in particular suspicious payments for road transport in areas controlled by the Islamic State (IS) organization, suspected of having finished in the pockets of the jihadist group when it controlled part of the territory Iraqi. At the end of April, Swedish justice also announced the opening of an investigation into possible facts of corruption, in particular the possible payment of bribes to members of the Islamic State in Iraq.

This affair worries investors, because Ericsson has a liabilities in the matter. In December 2019, the group had already paid a billion dollars to American justice to close prosecution of corruption in five other countries (Djibouti, China, Vietnam, Indonesia and Kuwait), as part of a transactional agreement (Deferred Prosecution Agreement).

/Media reports.