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Ericsson will make a $1.2 billion provision to settle US probes, flags and banners to third-quarter hit

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

(Reuters) – Mobile telecoms gear maker Ericsson said on Thursday third-quarter results will be hit by a 12-billion Swedish kronor ($1.23 billion) and a provision for the creation was made for US to examine.

The study, by the U. S. Securities and Exchange Commission and the u.s. Department of Justice (doj), have been associated with the company’s compliance with the U.S. Foreign Corrupt Practices Act (FCPA), Ericsson said in a statement.

The Swedish company said that it is an estimate of an amount of $1 billion, which, together with other related expenses, on account of the research.

“It’s a process of finding a solution, it is still going on,” Ericsson said.

The company identified any violations of the code of business conduct and the FCPA, in the course of the investigation, Ericsson said, adding that the violations were the result of many failings, including that the company failed to respond to red flags and a lack of internal controls.

“It is important to acknowledge that the company has failed in the past,” Ericsson’s Chief Executive Borje Ekholm said.

The Stockholm-based company said that it would be better the compliance program, without more details.

In addition to the financial provisions, the company has said that it is expected that the studies will lead to loss of reputation, to Ericsson, which will have a negative impact.

Ericsson said it is in the first instance, received a lot of inquiries from, the SEC in 2013, the ministry of justice, in 2015, to add in cooperation with the authorities.

Reporting Sathvik N, and Kanishka Singh in Bengaluru, Editing by Shri Navaratnam and Sherry Jacob-Phillips

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