© Reuters. Ericsson logo seen at the Third China International Import Exhibition (CIIE) in Shanghai, China, November 5, 2020. REUTERS / Aly Song
By Johann Alander and Nate Raymond
STOCKHOLM (Reuters) – Swedish telecommunications company Ericsson (BS :), its chief executive and chief financial officer, has been charged in a US group case for misleading investors over the company’s deals in Iraq, according to a lawsuit in the New York court. York on Friday.
Ericsson is at the center of a scandal over potential payments to Islamic State in Iraq. On Wednesday, the US Department of Justice said it was in violation of the Deferred Prosecution Agreement (DPA) from 2019, as it did not fully disclose details of its operations in Iraq.
The complaint, from the Pomerantz law firm to the East District Court in New York, said Ericsson had, among other things, misled investors by overestimating the extent to which it had eliminated the use of bribes.
An Ericsson spokesman could not be found to comment immediately, but Ericsson said in a brief statement that the company and “certain (company) employees” had been named as defendants in connection with “alleged false and misleading statements” about Iraq.
Under the terms of the 2019 DPA, Ericsson paid more than $ 1 billion to resolve a series of corruption investigations involving bribes in China, Vietnam and Djibouti, and agreed to cooperate with the Ongoing Investigations Division.
Ericsson lost almost a third of its market value after reports of alleged bribery surfaced in the media in February.
Ericsson said an internal audit, which ended in 2019 but was only released in February after media inquiries, identified payments designed to bypass Iraqi customs at a time when militant organizations, including Islamic State, controlled some routes.
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