Ericsson will have to pay more than $1 billion to resolve U.S. corruption probe

WASHINGTON (Reuters) – the Swedish mobile telecommunication company Ericsson (ERICb.ST) has agreed to pay more than $1 billion to resolve probes into corruption, including the bribing of officials for the U.S. Department of Justice said on Friday.

FILE PHOTO: the Ericsson logo is displayed at the Mobile World Congress (mobile world CONGRESS), Shanghai, China, 28th June, 2019 at the latest. REUTERS/Aly Song

The bribery that took place over the course of many years, in countries such as China, Vietnam, cambodia, and Djibouti, the company said. The total cost of a criminal penalty of more than $520 million, with an additional $540 million to be paid to the united states Securities and Exchange Commission (SEC), in a similar case.

The company admitted that it had conspired with others in violation of the Foreign Corrupt Practices Act (FCPA) from at least 2000 up to and including 2016 by taking part in a scheme to pay bribes, and falsifying the books and records and by failing to implement reasonable internal accounting controls, the Justice Department said in a statement.

“Some workers in certain markets, some of whom were in leadership positions in those markets have acted in bad faith and deliberately implemented adequate controls,” Ericsson’s CEO Borje Ekholm said in a conference call on Saturday.

“I look at what has happened, and if it’s a completely unacceptable and very disturbing chapter in our history.”

Ericsson’s use of third parties to pay bribes to government officials, to protect and to preserve, authorities said. Consultants have been retained to create a slush fund, and the money is transferred to a third party, according to the complaint.

One of the subsidiaries of the company Ericsson Egypt Ltd., pleaded guilty in the Southern District of New York, on a charge of conspiracy to violate the anti-bribery provisions of the FCPA.

Pleading guilty can lead to a additional severe sanctions, including the revocation of licences, and the company will negotiate waivers in order to be sure that they will continue to work.

“By the mud of the funds, kickbacks, bribes, and graft, Ericsson has performed in the telecom company with the guiding principle that” money talks,” ” the public Prosecutor of the s. S. and Geoffrey Berman of the Southern District of New York, said in a statement.

Ericsson said that it had reviewed its anti-corruption program and the actions taken for the improvement of the code of ethics and compliance.

It has already been said, the co-operation with the united states authorities, and that it would take a $1.2 billion provision in relation to the probe.

Carl Mellander, chief executive officer (ceo), said the amount was fully covered by a provision of the company during the third quarter, and added it would not have an impact on any financial objectives.

The amount of the settlement, today it is significantly, I can confirm that we will be able to manage its cash, with the funds available,” he said on a conference call.

Reporting by Chris Prentice in Washington; Additional reporting by Sathvik S in Bengaluru and Johan Ahlander in Stockholm; Editing by Bill Berkrot and Rosalba O’brien

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