Swedish telco Ericsson has admitted it breached an agreement with the US Department of Justice, by withholding evidence of corruption at the company, including payments to the ISIS terror group in Iraq.
In 2019, Ericsson paid $1 billion to the Department of Justice to settle a long-running investigation into multiple cases of bribery and corruption in China, Indonesia, Vietnam, Djibouti, and Kuwait. It now admits that it breached that agreement, by failing to declare the payments to ISIS terrorists - even though it appears to have been aware of them at the time.
In February 2022, it was revealed that Ericsson may have paid ISIS both for access through territory controlled by the terror group, and to continue doing business in the region.
Its contractors were held hostage after Ericsson sent them to negotiate with ISIS. Millions of dollars remain unaccounted for.
Ericsson's main headquarters found out about the scandal due to an internal investigation in 2019, but did not disclose the information to the DoJ.
The company admitted what it had done in February 2022, but made the announcement just a day after the International Consortium of International Journalists asked questions about the report for its expose into Ericsson corruption - suggesting that the company just came clean to get ahead of the story.
On Sunday, analysts at Citibank led by Andrew Gardiner said that “we expect Ericsson stock to be uninvestable for most investors for the foreseeable future."
The Nasdaq Stockholm stock exchange is believed to be investigating the company as well.
Ericsson CEO Börje Ekholm called the misconduct “hugely embarrassing and hugely unsatisfactory."