The probe relates to Ericson’s business practices in China.
Swedish Daily Svenska Dagbladet (SvD) has reported citing sources familiar with the matter at hand, Swedish telecom gear manufacturer is being investigated by U.S. law enforcement agencies over possible corruption charges related to its business in China.
As per SvD’s website, the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) are investigating Ericsson.
Ericson’s spokesperson, while declining comment on this matter has stated that the company is cooperating with U.S. authorities over its operation of March 2013.
“As a listed company, we always follow the requirements to publicly disclose any information about events that would have a material impact on the company or its finances,” said Ericson’s spokesperson.
In 2013, Ericsson had confirmed media reports that U.S. authorities have requested it for information. According to media reports of that time, Ericson’s business practices in Romania were being investigated by U.S authorities.
While the SEC did not immediately return a request for comment outside U.S. regular business hours, the DOJ declined comment.
If the investigating agencies find instances of corruption, it could result in the levying of heavy fines for the company under the Foreign Corrupt Practices Act.
Earlier in February, Vimpelcom, a mobile operator agreed to shell out $795 million to U.S. & Dutch authorities to settle a bribery case in Uzbekistan. Nearly half of that amount was to U.S. authorities.
The Swedish daily has reported that a former Ericsson executive in Asia had a business interest in Ericson as he was a supplier to the company. This practice is in breach of company policy. It is however unclear as to whether this will form part of the investigation of U.S. authorities.
As per the newspaper, earlier the SEC had shown interest in a couple of business deals made by one of Ericson’s unit – Microwave Systems, which it divested in 2006.