Ericsson to start ‘comprehensive review’ of Iraq scandal
Ericsson has told its new chief legal officer, who joined the company yesterday, to start a “comprehensive review of the [company’s] conduct relating to Iraq”.
The Swedish telecoms vendor announced last week that Scott Dresser (pictured), former group general counsel of Veon, would replace Xavier Dedullen in the top legal role.
Dresser’s appointment comes as the company faces an onslaught from the US Department of Justice (DoJ) that might lead to fines exceeding the US$1 billion in paid in 2019 for admitted misconduct in China, Djibouti, Egypt, Kuwait and Vietnam.
Ericsson hid from the DoJ in 2019 that it already knew about bribing the terrorist group Isis to transport telecoms equipment across Iraq. It was already conducting an internal investigation, only revealed in February by the International Commission of Investigative Journalists (ICIJ).
The previous DoJ deal meant the company is operating under a monitorship and deferred prosecution agreement, under which it should reveal any relevant misdeeds.
Now the DoJ is considering whether to impose a further fine on Ericsson.
Company chairman Ronnie Leten said: “While Ericsson since 2017 has taken significant steps in improving the culture of ethics and compliance, further efforts are underway to help ensure that the company operates at all times ethically and with integrity including in relation to the current issues before the DoJ.”
The board said yesterday that it has “full confidence” in Börje Ekholm, CEO since January 2017. He replaced Hans Vestberg – now CEO of Verizon – who was fired because of the company’s financial performance.
The board said it was confident in Ekholm “not only in regard to driving the company’s performance, but also in regard to the ethical and compliance transformation of the organization, which he continues to lead”.
But the board added that Dresser “will lead the comprehensive review of the conduct relating to Iraq and how it was addressed. This process is ongoing and we will act promptly to address shortcomings or misconduct identified.”
Meanwhile later today Ericsson is having a meeting – for “shareholders and others” – on its “enhanced ethics and compliance program and a summary of recent events”.
Leten, Ekholm and Dresser will all take part, along with CFO Carl Mellander and Laurie Waddy, chief compliance officer.