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Ericsson is at the centre of a scandal over potential payments
to the Islamic State in Iraq. On Wednesday the U.S. Department
of Justice said it was in breach of a 2019 deferred prosecution
agreement (DPA) for failing to fully disclose details of its
operations in Iraq.
The filing, by law firm Pomerantz to the District Court of
Eastern District of New York, said that Ericsson among other
things had misled investors by overstating the extent to which
it had eliminated the use of bribes.
An Ericsson spokesperson could not immediately be reached for
comment but Ericsson said in a brief statement that the company
and "certain (company) officers" had been named as defendants in
connection with "allegedly false and misleading statements"
concerning Iraq.
Under the conditions of the 2019 DPA, Ericsson paid more than $1
billion to resolve a series of corruption probes, involving
bribery in China, Vietnam and Djibouti, and agreed to cooperate
with the department for ongoing investigations.
Ericsson has lost almost a third of its market value since media
reports of the alleged bribes broke in February.
Ericsson said that an internal probe, which ended in 2019 but
was only made public in February after media inquiries, had
identified payments designed to circumvent Iraqi customs at a
time when militant organisations, including Islamic State,
controlled some routes.
(Reporting by Johan Ahlander in Stockholm and Nate Raymond in
Boston; Editing by Sandra Maler)
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