Thursday, June 16, 2016

Suspected corruption – Ericsson examined in US – Swedish Dagbladet

Ericsson president and CEO Hans Vestberg. Photo: Magnus Hjalmarsson Neideman

The American authorities’ interest for Ericsson can become a nightmare for shareholders, including principal owners Wallenberg sphere of power companies Investor and Industrivärden.

It also threatens to blacken the reputation of some of Sweden’s foremost business peaks. The Ericsson Board is including former Volvo CEO Leif Johansson, Investor’s Chairman Jacob Wallenberg, Investor’s former CEO Börje Ekholm and Industrivärden’s new president Helena Stjernholm.

In addition, threaten an economic blow. Ericsson is the fact listed on the US Nasdaq stock exchange and is subject to the tough US laws on corruption. The company thus risk being forced to pay billions in damages and fines.

As SvD Business Experience have both the American counterpart to the Swedish Financial Supervisory Authority, the Securities Exchange Commission (SEC) and the US Department of Justice Department of Justice (DOJ) initiated a review of Ericsson.
According to several independent sources, the SEC is driving the investigation. SEC will have already asked questions to Ericsson. Only a handful of people in Ericsson’s top management should be familiar with the SEC’s battery of questions to the company.

The examination is conducted under high secrecy from the SEC’s side, but an area that authority stated examine is Ericsson’s operations in China, both conditions in recent years and events that are further back in time.

as SvD Business could reveal Friday kicked Ericsson recently its Asia Director Mats H Olsson in dramatic shapes.
his leadership has been paved with internal criticisms of both misconduct and suspected corruption during the time he held various senior management posts in Asia. Whether the SEC’s investigation include Mats H Olsson’s actions in China is unclear. It is clear, however, that a senior manager within Ericsson in 2006 sounded the alarm to the then CEO Carl-Henric Svanberg that Mats H Olsson had business interests in a supplier to Ericsson, a direct violation of company rules.

SvD Business can now reveal more details. Subcontractor company had practically been given a monopoly on delivering to Ericsson in China.
That the company would manage the deliveries called resources from other parts of Ericsson. Ericsson employees brought in to help a vendor as the highest responsible Ericsson boss himself had interests should have done the whistle-blowing boss upset.
Ericsson’s then CEO Carl-Henric Svanberg was informed of the suspected corruption through a letter and an internal investigation was added.
whistle blower’s employment contract was terminated by Mats H Olsson at the end of 2005.

SvD Business can now reveal that the whistle-blower in November 2005 was in direct contact with Ericsson’s current CEO Hans Vestberg. § Vestberg should have had the choice to either ask Mats H Olsson leave Ericsson or let it whistle-blowing head end.

Documents SvD Business studied the show that Ericsson’s top management, with Carl-Henric Svanberg and Hans Vestberg, solved the situation by early retirement whistle blower and let Mats H Olsson continued. Hans Vestberg was then vice-president and head of business unit Global Services.

Mats H Olsson was thus able to continue as one of Ericsson’s top managers in Asia further ten years.

The SEC has previously shown that one does not hesitate to investigate and require substantial damages for incidents of suspected corruption that are both five or ten years ago. SvD also reports that the SEC expressed interest in Ericsson Business related to defense company Ericsson Microwave Systems was sold in 2006.

Swedish Radio has previously revealed that Ericsson made use of both agents and bribes to sell their radar. Among other was high in power in several countries such as Oman, Algeria, Syria and Greece received money under the echo. The legislation that the US government applies on suspicion of corruption and money laundering is primarily known as the Foreign Corrupt Practices Act.

A recent example at the SEC’s examinations can lead to the Russian VimpelCom, as well as Ericsson is listed in the US. In February this year forced Vimpelcom to pay a total of $ 795 million, equivalent to 6.5 billion, in a deal with authorities in several countries after the SEC investigated the company’s purchase of mobile phone licenses in Uzbekistan. The SEC could show that VimpelCom paid $ 114 million in bribes to the Uzbek regime.

Vimpelcom’s deal is one of the largest SEC met and is one of eleven made by the Agency this year.

the four recent cases have concerned suspected corruption in China, both US and foreign companies.

the pharmaceutical company Novartis has paid a quarter of a billion for violating corruption laws and in March was forced Ericsson competitor US Qualcomm to settle with the SEC for an investigation of the company’s operations in China.

SvD business’ve searched SEC and DOJ for comment on the audit of Ericsson, but the US authorities declined to comment . SvD has unsuccessfully sought Ericsson for comment.


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