Swedish telecommunications company Ericsson, its chief executive officer and chief financial officer, have been named defendants in a US class-action lawsuit alleging misleading investors about the company’s operations in Iraq. This was announced on Friday by the New York court.
The company has been at the center of a scandal over potential payments to the Islamic State of Iraq. On Wednesday, the US Justice Department said it violated a 2019 deferred prosecution agreement by failing to fully disclose details of its operations in Iraq.
The lawsuit, filed by law firm Pomerantz in the District Court for the Eastern District of New York, alleges that Ericsson misled investors by exaggerating the extent to which they refused to pay bribes, among other things.
Under the terms of the agreement mentioned above, Ericsson has paid more than $1 billion to investigate a number of corruption cases involving bribery in China, Vietnam and Djibouti, and has agreed to cooperate with the department in ongoing investigations.
Since the alleged bribes were reported in the media in February, the company has lost almost a third of its market value.
The company said an internal investigation, which ended in 2019 but was only made public in February following media inquiries, uncovered payments meant to bypass Iraqi customs at a time when militants, including the Islamic State, controlled some of the routes.
Source: ixbt
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