Swedish telecommunications giant Ericsson announced Thursday evening that the US Financial Markets Authority has launched an investigation into allegations of corruption in Iraq that could lead to new fines imposed on the company by the US judiciary.
The company said in a statement that “the US Securities and Exchange Commission has informed Ericsson of the start of an investigation into the facts set out in the company’s 2019 report on Iraq.”
“It’s still too early to determine or predict the outcome of this research, but Ericsson is working fully with the SEC,” it said.
Ericsson did not elaborate on the content of the investigation, but a large number of shareholders of the Swedish group criticized the lack of transparency in the markets.
Earlier this year, the revelation of this corruption case in Iraq led to a sharp drop of about 30 percent in the stock price of the leading group in the stock market, without any improvement since then.
In mid-April, Erickson spoke of new “potential” fines from the US Department of Justice, whose universal jurisdiction allows it to pursue foreign groups.
The case came to light in February before the release of a major investigative report coordinated by the International Consortium of Investigative Journalists. This prompted Ericsson to announce the results of an internal investigation in 2019 to determine the facts of possible corruption in the group’s activities in Iraq over the past eight years.
Internal investigations, in particular, point to suspicious payments for ground transportation in areas controlled by the Islamic State, which are believed to have ended up in the organization’s pocket.
At the end of April, Swedish courts also announced the start of an investigation into possible acts of corruption, in particular the possible payment of bribes to members of the Islamic State in Iraq.
This worries investors because Ericsson has a track record in this area.
In December 2019, the group paid $ 1 billion to the US judiciary to close corruption charges in five other countries (Djibouti, China, Vietnam, Indonesia and Kuwait) as part of a contract or “suspended surrogate agreement.” .
Source: Lebanon Debate
