Erickson said it was too early to determine or predict the outcome of the investigation
Swedish seller Ericsson says the U.S. Securities and Exchange Commission (SEC) has launched an investigation into the issues described in the company’s 2019 Iraq investigation report.
In a brief statement, Ericsson said it was cooperating fully with the securities regulator and that it was too early to determine or predict the outcome of the investigation.
The seller said in February that an internal investigation had found that it had at least paid Islamic State militants in Iraq in 2011.
The US Department of Justice (DOJ) is also investigating the company’s conduct. Ericsson had earlier said it would be fined by US authorities for conducting bribery investigations in Iraq.
“Resolving these issues may result in various actions by the US Department of Justice (DOJ) and may include additional financial payments, the amount of which cannot be reliably estimated at this time. As this process continues, we are limited to what we can say about the historical events involved in the Iraq investigation and our ongoing engagement on this issue. We are fully committed to working with the DOJ, and our work remains a top priority in strengthening our ethics and compliance programs, controls and our culture, “said Ericsson CEO Borge Ekholm earlier.
In February, Ericsson Says That Iraq investigation covers the behavior of Ericsson employees, vendors and suppliers in Iraq during the period 2011-2019. The agency noted that the investigation found serious violations of the Code of Conduct and the Code of Business Policy. It has identified evidence of corruption-related misconduct, including: making financial donations without an obvious beneficiary; Paying a supplier for work without a specific opportunity and documentation; Uses suppliers to pay cash; Inadequate travel and expense funding; And inappropriate use of sales agents and consultants. In addition, it found violations of Ericsson’s internal financial control; Conflict of interest; Non-compliance with tax laws; And obstruction of investigation.
The investigation team also identified the use of alternative transport routes to pay intermediaries and evade Iraqi customs, at a time when terrorist groups, including ISIS, controlled some transport routes. Investigators were unable to determine the final recipient of the payment. Payment schemes and cash transactions that have potentially created a risk of money laundering have also been identified. ”
Ericsson said the company continues to work with external consultants to review the results of the 2019 investigation and remedies to identify any additional measures the company should take.
