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Ericsson releases details of internal probe into suspected Isis bribes

Ericsson employees may have bribed Islamic State group members to get road transports through Iraq, the Swedish telecoms giant said.

Ericsson releases details of internal probe into suspected Isis bribes
File photo of Ericsson CEO Börje Ekholm. Photo: Jessica Gow/TT

“What we see is that people have paid for road transport through areas controlled by terrorist organisations, including Isis,” Börje Ekholm told Swedish financial daily Dagens Industri, about the extremist group that’s also often referred to as the Islamic State or IS.

“With the means we have, we haven’t been able to determine the final recipients of these payments,” he added.

Ericsson’s share price tumbled by seven percent in opening trading on the Stockholm stock exchange after the news.

Ekholm’s comments came hours after the company released a statement late Tuesday admitting “serious breaches of compliance rules and the company’s code of business ethics” regarding Ericsson employees, vendors and suppliers in Iraq between 2011 and 2019.

It said an internal investigation conducted in 2019 had revealed “evidence of corruption-related misconduct”.

It included “making a monetary donation without a clear beneficiary; paying a supplier for work without a defined scope and documentation; using suppliers to make cash payments; funding inappropriate travel and expenses; and improper use of sales agents and consultants”.

In addition, it found violations of Ericsson’s internal financial controls, conflicts of interest, non-compliance with tax laws and obstruction of the investigation.

Ericsson said payment schemes and cash transactions that “potentially created the risk of money laundering were also identified” but “the investigation could not identify that any Ericsson employee was directly involved in financing terrorist organisations”.

Several employees left the company as a result of the investigation, “and multiple other disciplinary and other remedial actions were taken”, Ericsson said in the statement.

Ekholm told Dagens Industri that Ericsson had shared the conclusions of its investigation with US authorities.

The company said it had chosen to disclose details of the now two-year-old investigation due to “detailed media inquiries from Swedish and international news outlets”.

Swedish public broadcaster SVT said its investigative news show Uppdrag Granskning had put questions to Ericsson, in collaboration with the International Consortium of Investigative Journalists (ICIJ).

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BUSINESS

Huawei loses Swedish appeal over 5G ban

A Swedish court on Wednesday rejected an appeal from China's Huawei over the government's decision to ban the network equipment giant from the rollout of 5G mobile network infrastructure in the Nordic country.

Huawei loses Swedish appeal over 5G ban

The administrative court of appeal in Stockholm said in a statement it believed it was fair to assume that the use of Huawei’s products in central functions of the 5G network “can cause harm to Sweden’s security.”

After the UK in the summer of 2020, Sweden became the second country in Europe and the first in the EU to explicitly ban Huawei from almost all of the network infrastructure needed to run its 5G mobile network.

Beijing warned at the time that the Swedish Post and Telecom Authority’s (PTS) decision could have “consequences” for the Scandinavian country’s companies in China, prompting Swedish telecom giant and Huawei competitor Ericsson to worry about retaliatory measures.

The PTS’ decision also included a provision that equipment already installed had to be removed by January 1, 2025, which the appeals court also confirmed.

“Sweden’s security is a particularly strong interest and the Swedish Post and Telecom Authority’s decision is based on a real, current and sufficiently serious threat to Sweden’s security,” judge Anita Linder said in a statement.

Huawei first appealed the decision to a lower court which also sided with the PTS in June 2021.

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