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TAX

Ericsson execs acquitted in tax case

Five Ericsson executives accused of faking invoices in an attempt to slash the company’s tax bill have been found not guilty by an appeal court in Stockholm.

The five senior managers at the Swedish telecommunications giant were accused of fabricating the invoices, worth 3.3 billion kronor, which were sent out to 33 companies.

The five executives charged over the alleged fake invoices were previously acquitted by Stockholm District Court. This ruling was confirmed by Thursday’s judgment from the Svea Court of Appeal in Stockholm. If convicted, they could have faced jail sentences.

The invoices at the heart of the case were used to remunerate commercial agents abroad. Ericsson paid certain local agents through intermediaries to protect their anonymity. The invoices were viewed by the Swedish Economic Crimes Unit as an attempt to evade tax controls.

“We are very happy that all those prosecuted have been acquitted by Svea Court of Appeal and that we can now put this behind us. The investigation that led to these charges started over six years ago,” said Ericsson information director Henry Stenson in a statement.

“We have been confident all along that those charged were innocent of impeding a tax investigation and it has now been shown that we were right.”

The appeal court agreed with the district court that the invoices in question were neither false; nor, it said, were they defective in a way that they amounted to an evasion of Ericsson’s accounting obligations. Two of the court’s lay judges reserved themselves from part of the judgement.

SWEDEN AND UKRAINE

Ericsson suspends all Russia operations indefinitely

Swedish network equipment maker Ericsson said Monday that it was suspending all of its Russian operations over the war in Ukraine for the foreseeable future.

Ericsson suspends all Russia operations indefinitely

The telecom giant already announced in late February that it would stop all deliveries to Russia following Moscow’s February 24 invasion of Ukraine.

“In the light of recent events and of European Union sanctions, the company will now suspend its affected business with customers in Russia indefinitely,” Ericsson said in a statement.

The company added that it was “engaging with customers and partners regarding the indefinite suspension of the affected business.”

“The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave,” it said.

READ ALSO: How has Sweden responded to Putin’s war in Ukraine so far?

Hundreds of Western firms ranging from Ikea to Coca-Cola, Goldman Sachs and McDonald’s have stopped operations in the country since the invasion, with French banking group Societe Generale announcing Monday it was selling its stake in Russia’s Rosbank.

Ericsson has around 600 employees in Russia, and is a “major supplier to the largest operator MTS and the fourth largest operator Tele2,” a company spokeswoman told AFP, adding that together with Ukraine, Russia accounts for less than two percent of revenue.

As a result, the equipment maker said it would record a provision for 900 million Swedish kronor ($95 million, 87 million euros) for the first quarter of 2022 for “impairment of assets and other exceptional costs,” though no staff redundancy costs were included.
Ericsson is due to publish its first quarter earnings on April 14.

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