Shares of Ericsson fell as much as 8.5%, the in early trading Wednesday, after Borje Ekholm, chief executive of the Swedish telecoms equipment maker, told newspaper Dagens Industri that the firm could have made payments to ISIS terror organization to gain access to certain transport routes in Iraq.
In an official statement, the firm said that an internal investigation from 2019 had found critical breaches of compliance rules in Iraq including payments for transport routes to evade local customs.
In the interview, Ekholm admitted that Ericsson had identified “unusual expenses dating back to 2018”. However, the firm hasn’t yet identified who the final recipient of the money was. “What we are seeing is that transport routes have been purchased through areas that have been controlled by terrorist organizations, including ISIS,” Ekholm added.
It's worth noting that this is not Ericsson's first corruption probe. In 2019, the firm paid over $1 billion to settle US criminal and civil investigations into foreign corruption in countries including China, Indonesia, Vietnam, Djibouti and Kuwait.