Ericsson and its CEO are sued in the US for conduct in Iraq

Swedish telecommunications company Ericsson, its CEO and its vice president of finance are being charged in a US class-action lawsuit with deceiving investors about the company’s transactions in Iraq, according to a petition filed with a New York court. on Friday (4).

Ericsson is at the center of a scandal over possible payments to the Islamic State in Iraq. On Wednesday, the U.S. Department of Justice said the company had violated a 2019 settlement that delayed a lawsuit against it for not disclosing details about its operations in Iraq.

The petition, filed by law firm Pomerantz with the District Court for the Eastern District of New York, claims that Ericsson, among other things, misled investors by exaggerating its claims to eliminate the use of kickbacks.

An Ericsson spokesperson could not immediately be reached for comment, but the company said in a brief statement that it “and some of its officers” had been charged in connection with “allegedly false and misleading statements” concerning Iraq.

Under the terms of the agreement signed in 2019, Ericsson paid more than US$1 billion to resolve a series of corruption allegations involving kickbacks in China, Vietnam and Djibouti, and agreed to cooperate with the Department of Justice in other investigations.

Ericsson has lost almost a third of its market value since information about the alleged bribes surfaced in the media in February.

The company said an internal investigation, which ended in 2019 but only revealed publicly last month after the media began investigating the matter, had identified payments made to bypass Iraqi customs, at a time when militant organizations including the Islamic State, controlled some routes.

Translation by Paulo Migliacci