If you’ve recently been caught or called out for doing something you shouldn’t have been doing, you might be able to console yourself with the fact that whatever you did probably isn’t as bad as what the Swedish telecom and networking company Ericsson did: they may have paid ISIS — yes, that ISIS — for access to transport routes in Iraq.
In an interview with the Swedish financial newspaper Dagens Industri (“Today’s Industry”), Ericsson’s CEO said that the company noticed what he called “unusual expenses” in Iraq that go back to 2018, and that they haven’t yet determined the final recipient of the money.
The “money quote” (pardon the pun) is:
“What we are seeing is that transport routes have been purchased through areas that have been controlled by terrorist organizations, including ISIS.”
Borje Ekholm, CEO, Ericsson from Bloomberg’s article, Ericsson Shares Crash After CEO Says Firm May Have Paid ISIS
After investigating, they decided that it wasn’t a big enough deal to make public:
“The materiality of our findings did not pass our threshold to make a disclosure. That was our judgment when we completed the investigation two years ago.”
Borje Ekholm, CEO, Ericsson from Reuters’ article, Ericsson says its 2019 probe found serious compliance breaches in Iraq
This is the latest in a series of humiliating episodes for the company, who are still coming out from under a major corruption probe (they had to plead guilty to a campaign of corruption and bribery across China, Djibouti, Indonesia, Kuwait, and Vietnam from 2000 to 2016), and from paying a settlement for over $1.2 billion to the U.S. Department of Justice (DOJ). Last October, the DOJ accused them of breaching the settlement agreement by failing to provide certain documents.
As you may have guessed, Ericsson’s share prices have dropped in the wake of this news. The reported drops range from 11 to 15%, depending on the news source.
Many of the headlines refer to the fact that Ericsson may have given money to ISIS for favors, which reminds me of this scene from Arrested Development:
Find out more
- Bloomberg: Ericsson Shares Crash After CEO Says Firm May Have Paid ISIS
- Reuters: Ericsson says its 2019 probe found serious compliance breaches in Iraq
- MarketWatch: European stocks struggle to hold on to gains as Ericsson tumbles over Iraq corruption findings
- Barron’s: Ericsson Shares Sink After Company Says It May Have Made Payments to ISIS
- Financial Times: Ericsson says it may have paid Isis terror group in Iraq
- Engadget: Telecoms giant Ericsson may have paid ISIS for access to Iraq