STOCKHOLM – As previously disclosed, telecom manufacturer Ericsson has been co-operating with investigations by the United States Securities and Exchange Commission and Department of Justice regarding the company’s compliance with the U.S. Foreign Corrupt Practices Act.
The company announced today it will make a SEK12 billion (US$1 billion). provision related to resolving the investigations, “that will impact the third quarter 2019 results,” reads the release. The money is to cover any sanction and other related costs. The process to find a resolution is still ongoing.
The investigation, which Ericsson has voluntarily co-operated with, covers a period ending Q1 2017 “and revealed breaches of the Company’s Code of Business Ethics and the FCPA in six countries: China, Djibouti, Indonesia, Kuwait, Saudi Arabia and Vietnam,” reads the press release.
“In the course of the investigations, the Company identified breaches of its Code of Business Ethics and the FCPA. It is the Company’s assessment that the breaches are the result of several deficiencies, including a failure to react to red flags and inadequate internal controls which enabled a limited number of employees to actively circumvent internal controls for illegitimate purposes,” adds the company’s statement.
“Disciplinary measures, including terminations where appropriate, have been taken against identified individuals determined to have breached the Code of Business Ethics.”
“Over the last two years we have operationally turned around our company and established a strong portfolio and competitive cost structure. With today’s announcement we confront another legacy issue and take the next step in resolving it,” said Börje Ekholm, president and CEO. “We have to recognize that the Company has failed in the past and I can assure you that we work hard every day to build a stronger Ericsson, where ethics and compliance are cornerstones in how we conduct business. Over the past two years, we have made significant investments in our ethics and compliance program including our investigative capabilities and have taken actions against employees who have transgressed our values and standards.”
