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Sweden opens criminal probe into Ericsson over Iraq corruption claims

Swedish prosecutors said on Wednesday they had opened up an investigation into cases of corruption involving telecoms giant Ericsson in Iraq, including suspected bribes to the Islamic State (IS) group.

Sweden opens criminal probe into Ericsson over Iraq corruption claims
File photo of Ericsson's CEO Börje Ekholm. Photo: Jessica Gow/TT

Senior Public Prosecutor Leif Görts confirmed that the investigation had been launched following reports of potential corruption between 2011 and 2019.

“We have reason to believe that crimes of corruption may have been committed in Iraq during this time period and therefore deemed it necessary to open a preliminary investigation,” Görts told AFP, stressing it was still in its “early stages.”

The network equipment maker’s chief executive Börje Ekholm conceded in a newspaper interview in February that some Ericsson employees may have bribed IS members for road transport through areas controlled by the group in Iraq.

The admission was made before the publication of a report by the International Consortium of Investigative Journalists (ICIJ) revealing that an internal Ericsson investigation from 2019 was never made public.

The internal probe had identified possible corruption between 2011 and 2019 in the group’s Iraqi operations.

Ericsson has already agreed to pay $1 billion in penalties to US authorities to close corruption cases in Djibouti, China, Vietnam, Indonesia and Kuwait in 2019, and said last week that it expected it would have to pay more fines over the Iraq case.

At Ericsson’s annual meeting in late March, shareholders voted against discharging Ekholm and the board from liabilities, a normally routine decision. Both Ekholm and board members were nonetheless re-elected to their positions.

The Swedish firm’s shares have lost over a quarter of their value since mid-February.

Member comments

  1. I remember those days (2008-2017) when I was employed in Ericsson as an R&D Eng. and I had to go through a bunch of courses on Morale/Ethics dictated (or orchestrated) by the Ericsson Leadership team. It seems that the Ericsson leadership does not believe in the basic tenet of business Ethics/morale while discharging their duties otherwise we would not have seen so many corruption cases against the top brats. I would suggest the Ericsson Leaders to divert their focus from R&D engineers to top brats of the company as far as rendering those courses is concerned. This will save lots of working hours and resentment on the lower level of the company. Those who are discharging their duties holding vulnerable positions where morale or ethics could be compromised, should go through not only necessary courses but also psychological evaluation every now and then.

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BUSINESS

Philip Morris offers $16 bn for Swedish smokeless tobacco firm

Marlboro-maker Philip Morris International said on Wednesday that it had offered $16 billion to acquire smokeless tobacco company Swedish Match as the US group aims to move away from its traditional cigarette business.

Philip Morris offers $16 bn for Swedish smokeless tobacco firm

The board of Swedish Match recommended that its shareholders accept the bid of 106 Swedish kronor per share, nearly 40 percent above its closing share price on Monday, the companies said in separate statements.

The deal would total 161.2 billion Swedish kronor (15 billion euros).

Stockholm-based Swedish Match derives more than 65 percent of its revenue from smoke-free products, including chewing tobacco and the Zyn brand of nicotine pouches.

Philip Morris announced in 2016 a long-term goal to stop selling cigarettes and replace them with alternatives that it says are less harmful.

The US company sells cigarette brands such as Marlboro and Chesterfield in 180 markets outside the United States and has invested billions of dollars since 2008 in vapor products, oral nicotine and other “reduced-risk” products.

Last year it clinched a controversial takeover of British breathing inhaler manufacturer Vectura, despite fierce opposition from health campaigners and medical groups.

The group plans to generate at least $1 billion in annual net revenues from nicotine-free products by 2025.

Philip Morris and Swedish Match had confirmed the takeover talks on Monday following a Wall Street Journal report.

“We are pleased to announce this exciting next step in Philip Morris International’s and Swedish Match’s trajectory toward a smoke-free future,” the US company’s chief executive, Jacek Olczak, said in a statement.

“Underpinned by compelling strategic and financial rationale, this combination would create a global smoke-free champion — strengthened by complementary geographic footprints, commercial capabilities and product portfolios — and open up significant platforms for growth in the US and internationally,” he said.

Swedish Match chairman Conny Karlsson told AFP that the deal was a “good offer” for shareholders.

“It’s great to have the chance to broaden the distribution of our products, which can compete with cigarettes,” Karlsson said.

Snus scandal

Swedish Match is also known for making cigars and “snus”, a form of snuff particular to Nordic countries.

The sale of snus, a moist powder tobacco originating from dry snuff, is illegal across the European Union, but Sweden has an exemption. It contains nicotine and comes in teabag-like pouches that are placed under the lip.

In 2012, Swedish Match said an associate to the EU’s then health commissioner had sought a 60-million-euro payment from the company to push for a proposed tobacco law that would lift the snus ban.

The firm filed a complaint with the European Anti-Fraud Office and the health commissioner, John Dalli, resigned from his post.

Dalli appeared in a Maltese court this year on charges of bribery and trading in influence over the lobbying scandal.

Swedish Match shares rose by almost nine percent to 103.50 kroner following the takeover bid.

Philip Morris, listed on the New York Stock Exchange, was up 0.6 percent to $99.47 in electronic trading before the stock market opened.

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