Ericsson investors have turned their backs on chief executive Borje Ekholm after they refused to vote against discharging the board liability for supposed ISIS payments, meaning he and other top execs could be held personally liable.
Shareholders representing more than 10 per cent of the tech company’s shares voted against the motion, which means under Swedish law, they can in theory now be sued by the company and its investors.
It comes after more than $5bn (£3.8bn) was wiped from Ericsson’s market value following its explosive admission that it may have made payments to Islamic State (ISIS) based on “unusual expense claims in Iraq” dating back to 2018.
In a lengthy statement on the website, it said that during an internal investigation it identified payments made to intermediaries, as well as the use of alternate transport routes in connection with “circumventing Iraqi Customs at a time when terrorist organizations, including ISIS, controlled some transport routes”.
On top of this, the US Department of Justice (DoJ) said the company was in breach of a 2019 deferred prosecution agreement for failing to inform authorities of potential misconduct it had uncovered there. Investors were miffed after they were not given any information about the company probe until news broke in the media.
Both Ericsson Chairman Ronnie Leten and Ekholm said they could not give any further information about the investigation.
Nonetheless, shareholders approved Ekholm’s reappointment as CEO, as well as the board.