Saturday 7 December 2019 12:24 pm

Ericsson to pay more than $1bn to settle US corruption probe

Ericsson has agreed to pay $1.2bn (£913m) to resolve a US corruption probe.

The Swedish telecoms firm has settled the investigation into corruption, which included the bribing of government officials, the US Department of Justice said on Friday.

The bribing of officials took place over multiple years and in countries such as China and Vietnam.

Read more: Ericsson quarterly profit meets expectations as 5G rollout picks up pace

The charges include a criminal penalty of more than $520m, plus $540m to be paid to US Securities and Exchange Commission (SEC) in a related matter.

Ericsson admitted to conspiring with others to violate the Foreign Corrupt Practices Act (FCPA) from at least 2000 to 2016 by using bribery, as well as falsifying books and records and failing to implement reasonable internal accounting controls, the Justice Department said in a statement. 

“Certain employees in some markets, some of whom were executives in those markets, acted in bad faith and knowingly failed to implement sufficient controls,” Ericsson CEO Borje Ekholm said in a conference call on Saturday. 

“I view what has happened as a completely unacceptable and hugely upsetting chapter of our history.” 

The telecoms giant paid government officials through third parties in order to retain business, while consultants were used to create slush funds and transfer the money, authorities said.

A subsidiary, Ericsson Egypt, pleaded guilty to a violating anti-bribery provisions in the Southern District of New York, which could lead to additional sanctions, such as the revoking of licenses. The company could negotiate waivers to avoid this, however.

“Through slush funds, bribes, gifts, and graft, Ericsson conducted telecom business with the guiding principle that ‘money talks,’” US Attorney Geoffrey Berman said in a statement. 

Ericsson said it was cooperating with authorities and would make a $1.2bn provision in relation to the probes.

It also added that it has reviewed its anti-corruption program and taken measures to improve its ethics and compliance.