Ericsson comments on US and Greek corruption investigations

Swedish networking giant Ericsson has issued statements on two historical corruption investigations still underway in the US and Greece.

Last week Swedish newspaper Svenska Dagbladet reported Ericsson was being investigated over alleged corruption in its Chinese operations. Apparently a manager in Ericsson’s Asian business had been linked to an Ericsson subcontractor which had acquired the virtual monopoly to supply Ericsson in China.

The Svenska Dagbladet report named the Ericsson exec as Mats H. Olsson, SVP and Head of Ericsson Asia-Pacific since 2013, who Ericsson announced would be leaving the company on 1 July 2016, apparently as part of an executive team reshuffle.

Ericsson responded to the subsequent media interest with the following statement: “In March 2013, Ericsson received a voluntary request from US Authorities to answer a number of questions relating to Ericsson’s operations, something we have also confirmed to media in 2013. Ericsson cooperates with US Authorities to answer these and additional questions.

“While we strive to at all times conduct our business in compliance with applicable laws, matters do arise from time to time as a result of the global nature of our business.

“We will not provide any detailed comments on the request as such, but can say that it relates to Ericsson’s anti-corruption program and questions related to the Foreign Corrupt Practices Act. Ericsson cooperates with US Authorities and works diligently to answer the questions.

“As a listed company, we always follow the requirements to publically disclose any information about events that would have a material impact on the company or its finances. Should such materiality arise, Ericsson will disclose information in accordance with regulatory requirements.”

On top of that Ericsson subsequently decided to comment on another corruption investigation underway in Greece, relating to a defense agreement signed in 1999, which was also alluded to in the Svenska Dagbladet piece. Specifically Ericsson Microwave Systems won the contract to deliver an airborne radar system to Greece.

Seven current and former Ericsson employees have recently been summonsed as part of the ongoing investigation by a Greek prosecutor. Ericsson said the company has not been contacted by any authority on this matter and the summonsed employees have yet to be questioned or provided with the documentation from the investigation. Ericsson Microwave Systems was sold to Swedish engineering firm Saab back in June 2006.

Ericsson is getting a fair bit of heat from these investigations, coming as they do at a time when some of its major shareholders are getting impatient with the progress of its diversification strategy. Short of complete exoneration, the best outcome for Ericsson would seem to be a quick conclusion that any corrupt activity was isolated to one or two individuals and, of course, has not continued.