Swedish mobile telecom giant Ericsson has agreed to pay more than $1 billion to settle a bribery allegation case spanning the Middle East and Asia. The announcement was made by the US Department of Justice, which was probing into a series of allegations on Ericsson including bribing of government officials.
The company was accused by the U.S. authorities of bribing government officials "through slush funds, gifts, and graft." The Swedish telecom major was charged with conspiracies of violating the 1977 Foreign Corrupt Practices Act (FCPA).
What are the charges?
The US Department of Justice said that Ericsson admitted the charges and will be paying $1.2 billion to resolve the allegations that spanned countries like China, Djibouti, Vietnam, Indonesia and Kuwait over a period of several years.
Also, Ericsson Egypt Limited, a subsidiary of Ericsson, pleaded guilty to a charge of conspiring to violate the FCPA.
According to the US authorities, Ericsson admitted that it took such steps in an attempt to strengthen its position in the telecommunications industry. The overall charges include a criminal penalty of $520 million apart from $540 million that it will have to pay to the U.S. Securities and Exchange Commission (SEC) in a related matter.
"The settlement with the SEC and DOJ shows that we have not always met our standards in doing business the right way," Ericsson CEO Borje Ekholm said in a statement.
Bribery happened over 17 years in 5 countries
Ericsson conspired with third parties to bribe government officials in order to secure its position in the highly competitive telecommunications industry. The US Securities and Exchange Commission began investigating Ericsson in 2013.
However, the authorities started investigating cases dating back to the 1990s. It was finally bought to US Department of Justice in 2015 which in its judgement said that the company adopted corrupt means and violated the Foreign Corrupt Practices Act between 2000 and 2016.
"Ericsson's corrupt conduct involved high-level executives and spanned 17 years and at least five countries, all in a misguided effort to increase profits," Brian Benczkowski, head of the DOJ's criminal division, said in a statement.
Ericsson had earlier said that it was cooperating with the US authorities. The company also said that the $1.2 billion was fully covered by a provision that it had made in the third quarter itself and it won't affect the Ericsson's finances.