Ericsson, a Swedish telecommunications company and one of the biggest mobile provider companies in the world, recently got into the radar of the US government. Investigations found out that the company has been dealing with massive corruption over the years. To settle the charges, Ericsson agreed to pay a penalty that costs over $1 billion.
Ericsson Corruption Over the Last Decade
According to the investigation, between the years of 2000 to 2016, Ericsson was said to conspire illegal and corruption activities that violate laws under the Foreign Corrupt Practices Act (FCPA) in the US Department of Justice. This long-decade corruption involves bribing government officials, managing slush funds, creating false records, and failure to implement reasonable internal accounting controls inside the company. As said in the investigation, places, and countries like Djibouti, China, Vietnam, Indonesia, and Kuwait were the places that Ericsson made the enormous pile of corruption involved in the case.
Aside from this, the Securities and Exchange Commission also filed charges against Ericsson from the years 2011 to 2017 in which SEC identified as bribery. The total amount of Ericsson's settlement fund amounts to $1.2 billion-- providing a $520 million criminal penalty to the justice department and a payment of $540 million to the SEC.
One of the company's subsidiaries, Ericsson Egypt Ltd, already pleaded guilty on corruption and violating the anti-bribery laws of FCPA in the Southern District of New York. This admission of corruption may make Ericsson lose its license to operate, but the company was said to negotiate in court to continue its business.
Ericsson Management Identifies the Corrupt
Since the active cases of corruption were done from the past years, Ericsson CEO Borje Ekholm-- that only took his position in Jan 2017-- said that he was disappointed to his employees involved in the said corruption, which are mostly executives on the company.
"Certain employees in some markets, some of whom were executives in those markets, acted in bad faith and knowingly failed to implement sufficient controls," said Ekholm in Reuters.
Ronnie Leten, Ericsson's Chair of the Board of Directors, also explained that the company will now be more focused on tackling issues involving corruption in the company with their newly-released 'Ethics and Compliance Program' in their website.
"Ultimately we can only be successful if we have entrenched ethics and compliance culture. I am confident that with the significant steps already undertaken, we are better equipped to execute on our strategy without compromising on our values," said Leten.
What is Now Happening in Ericsson?
As of 2019, Forbes recognized Ericsson as one of the top 100 digital companies in the world, having a market cap of $33.4 billion and sales of $24.1 billion. On the official website of the company, the target goal of Ericsson focuses on widening its 5G technology audience on which it aims 2.6 billion 5G subscriptions in the year 2025.
CEO Ekholm still hopes Ericsson's phase of undergoing a major challenge involving corruption will give a 'resolution with the US authorities to allow them to close their legacy chapter."
"We can now move forward and build a stronger company," he added.
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