Ericsson Sued by Investor Over Disclosure of Possible ISIS Bribe

Ericsson Sued by Investor Over Disclosure of Possible ISIS Bribe



Ericsson Chairman Ronnie Leten said on Monday a comprehensive review is underway led by its new chief legal officer over the company's conduct relating to Iraq and how it was addressed.To get more ericsson updates, you can visit shine news official website.

Ericsson has been mired in a scandal in recent weeks over potential payments to the Islamic State in Iraq, and failing to fully disclose details of its investigation the U.S. Department of Justice (DoJ) as part of a 2019 agreement.Last week Ericsson replaced its Chief Legal Officer since 2018, Xavier Dedullen, appointing Scott Dresser, who has been Veon's general counsel for the last eight years.

"The Company continues to coordinate with the DOJ and other relevant authorities," said Leten, adding that Chief Executive Officer Borje Ekholm has the full confidence of the board.

Ekholm has been under fire for not disclosing its probe into corruption in Iraq, and proxy firm Glass Lewis has recommended shareholders vote to remove him from the board ahead of the company's annual general meeting on March 29.
Ericsson and its Chief Executive Officer Borje Ekholm were accused in a U.S. lawsuit of misleading investors about the company’s role in bribes allegedly paid to a terrorist organization ISIS to win business in Iraq.

The suit, which also names Chief Financial Officer Carl Mellander, was filed by investor David Nyy in New York federal court on Thursday and seeks class-action status. Nyy claims actions by the telecommunications company violated U.S. securities laws and resulted in “significant losses and damage” to investors.

Ericsson, which paid more than $1 billion in 2019 to avoid U.S. prosecution in a long-running corruption probe, revealed last month that an internal investigation showed its possible involvement in the payments to ISIS. That disclosure, along with subsequent developments, sent company shares down by about a third.

The U.S. Department of Justice has since accused Ericsson of violating its deferred prosecution agreement and says the company failed to make adequate disclosures about its operations in Iraq before entering into the 2019 agreement.

A report last week from the International Consortium of Investigative Journalists detailed allegations about Ericsson’s practices in Iraq, which included the claim about payments to ISIS.

Stockholm-based Ericsson said in a statement Friday it learned of the U.S. legal action after its the annual report was finalized Thursday. A company spokeswoman declined further comment.