Ericsson Starts Iraq Review

Ericsson Starts Iraq Review

Ericsson launched a comprehensive review of its conduct relating to Iraq and how this was addressed. The company chairman Ronnie Leten said that the CEO Borje Ekholm has the backing of the board.

Leten said Ericsson continues to coordinate with the US Department of Justice (DoJ) and other relevant authorities. As the fallout from Ericsson’s Iraq revelations continues, the chairman stressed Ekholm has the full confidence of the board.

Ekholm has been under fire in recent weeks for not disclosing Ericsson’s probe into corruption in Iraq. Reuters reported proxy advisory firm Glass Lewis recommended to shareholders that they remove him from the board ahead of the vendor’s annual general meeting on 29 March.

Ekholm and CFO Carl Mellander were also named in a class-action lawsuit filed in a US court on 3 March which alleges Ericsson misled investors over five years by overstating the extent to which it had reformed its business practices to eliminate the use of bribes to secure business in certain countries. In addition, major shareholder Cevian Capital reportedly called for broad changes to Ericsson’s corporate governance.

The latest controversy at Ericsson began when the vendor told the US DoJ about an internal probe into its business dealings in Iraq when settling separate issues in 2019. The revelation came days after the Swedish vendor disclosed the results of the investigation into its employees' and suppliers’ conduct in Iraq.