Ericsson employees may have bribed IS in Iraq: CEO

Ericsson employees may have bribed IS in Iraq: CEO
The CEO of Ericsson has said that some of his employees may have bribed Islamic State fighters for access across territory that they controlled.
2 min read
16 February, 2022
Ericsson found serious breaches of compliance rules and the company's code of business ethics [Getty]

Swedish telecoms giant Ericsson suspects some of its employees in Iraq may have bribed Islamic State group members to get its road transports through the country, its chief executive said Wednesday.

"What we see is that people have paid for road transport through areas controlled by terrorist organisations, including ISIS," Borje Ekholm told Swedish financial daily Dagens Industri, using another name for 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.

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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).