Ericsson is in turmoil. In anticipation of the upcoming release of a global survey by the International Consortium of Investigative Journalists (ICIJ), the 5G telecommunications equipment giant has admitted on February 15 the possible payment of kickbacks to Daesh.
The revelation of an internal investigation launched in 2019
In an interview the next day with the Swedish media Dagens Industrythe CEO of the company assured that were mobilized ” considerable resources to try to figure this out as best we can “.
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Ericsson says that ” Unusual expense claims in Iraq, dating back to 2018, sparked review “. The latter led to an internal investigation by the company the following year, into its presence in Iraq from 2011 to 2019.
These investigations would have revealed facts of corruption such as ” Make a monetary donation without a clear beneficiary; pay a supplier for work with no defined scope and no documentation; use vendors to make cash payments; fund inappropriate travel and expenses; and inappropriate use of sales agents and consultants “.
Worse still, the internal investigation would have brought to light the circumvention of Iraqi customs during the period when Daesh controlled part of the country’s territory. Börje Ekholm clarifies, “ What we are seeing is that transportation routes have been purchased through areas that have been controlled by terrorist organizations including ISIS “. The company claims to be unable to determine the final recipients of these payments “.
Ericsson, while recalling its humanist values, claims to have taken disciplinary measures against those responsible, if they have not been fired, to have terminated relations with subcontractors. The telecommunications giant intends to remain established in Iraq by promising strengthened training and awareness activities, third-party management policies, procedures and processes “.
Ericsson already in the sights of American justice
It is not sure that this is enough. The group is already at the heart of an anti-corruption investigation in the United States, recalls Reuters. In 2019, she paid $1 billion in fines after admitting wrongdoing in China, Vietnam, Indonesia, Kuwait and Djibouti. In October 2021 the US Department of Justice accused Ericsson of violating the agreement by withholding certain information. Corruption cases in Iraq could be affected.
The association, even supposed, to Daesh, the prospect of a new American sanction, the possible loss of confidence of Washington, after having benefited from its anti-Huawei policy, has, unsurprisingly, caused the collapse of the stock market from Ericsson. Since the revelations on the 15th in the evening the action has lost around 14.5%.
Ericsson is still awaiting the results of the ICIJ’s journalistic investigation. The consortium has took note of the press release from the Swedish giantpublished, by Ericsson’s own admission, following ” detailed inquiries from Swedish and international media “. The journalists regret that the company did not answer some of their questions and promise that the ICIJ and its partners will publish their own conclusions “soon”.