U.S. corruption probe puts renewed pressure on Ericsson

Fri Jun 17, 2016 7:26am EDT
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STOCKHOLM (Reuters) - Ericsson said on Friday it was cooperating with U.S. authorities in an inquiry over possible corruption dating back three years, adding to the pressure on the chief executive of the Swedish telecoms equipment maker.

Ericsson has been under fire in local media who have questioned the pay and leadership of CEO Hans Vestberg after weak results in April which sent Ericsson shares down by 15 percent in one day.

Ericsson issued a statement on Friday after Swedish daily Svenska Dagbladet (SvD) reported the company was being investigated over possible corruption in its China business.

Ericsson said it had initially received questions from U.S. authorities in March 2013, adding this had been reported by media at the time.

"Ericsson cooperates with U.S. Authorities to answer these and additional questions," the company said.

Media reports at the time said U.S. authorities were investigating Ericsson's business practices in Romania.

"We will not provide any detailed comments on the request as such, but can say that it relates to Ericsson's anti-corruption program and questions related to the Foreign Corrupt Practices Act," the company added.

Vestberg, chief executive since 2010, has also faced questions over his use of a corporate jet to travel to sports events and his appointment as chair of Sweden's Olympic Committee (SOC) when Ericsson is having to cut costs and rethink its strategy.

Vestberg has said his trips were with clients and not in breach of Ericsson policy and that the SOC role would not distract him from his job as chief of Sweden's largest exporter.   Continued...

A general view of an office of Swedish telecom giant Ericsson is seen in Lund, Sweden, September 18, 2014. REUTERS/Stig-Ake Jonsson/TT News Agency/File Photo