Ericsson facing US corruption probe related to China business

Written by on June 17, 2016 in News with 0 Comments
REUTERS/Stig-Ake Jonsson/TT News Agency/File Photo

REUTERS/Stig-Ake Jonsson/TT News Agency/File Photo

STOCKHOLM (Reuters) – Swedish mobile telecom gear maker Ericsson is being investigated by U.S. authorities over possible corruption related to its business in China, Swedish daily Svenska Dagbladet (SvD) reported late on Thursday, citing unnamed sources.

SvD said on its website the U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) are investigating Ericsson, whose shares are listed in Stockholm as well as on Nasdaq.

In an emailed statement, an Ericsson spokesperson declined to comment on the report other than saying the company was cooperating with U.S. authorities to answer questions over its operations it had received in March 2013.

“As a listed company, we always follow the requirements to publicly disclose any information about events that would have a material impact on the company or its finances,” the spokesperson said.

Ericsson confirmed to media in 2013 it had received a request for information from U.S. authorities, the spokesperson said. According to media reports at the time, U.S. authorities were then investigating Ericsson’s business practices in Romania.

DOJ declined to comment

The DOJ declined to comment on the Svenska Dagbladet report, and SEC spokespeople did not immediately return a request for comment outside regular business hours.

Findings of corruption by U.S. authorities may result in hefty fines for companies under the Foreign Corrupt Practices Act. In February, mobile operator Vimpelcom agreed to pay $795 million to settle U.S. and Dutch investigations into a bribery scheme in Uzbekistan. Roughly half of that amount was to U.S. authorities.

The newspaper said a former Ericsson executive in Asia had had a business interest in a supplier to Ericsson, in breach of company policy, but that it was unclear whether this was part of the investigations.

Also, the SEC had shown interest in some business deals made by Ericsson’s business unit Microwave Systems, which was divested in 2006, the paper said.

(Reporting by Sven Nordenstam; additional reporting by Diane Bartz in Washington; Editing by Cynthia Osterman)

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