- Settlement with Nokia of EUR 80
m (SEK 0.8 b equivalent)
related to 2019 resolution with the U.S. authorities
- Impact of EUR 80 m on EBIT and
EUR 26 m on cashflow in Q2 2021
STOCKHOLM, May 12, 2021 /PRNewswire/ -- Ericsson (NASDAQ:
ERIC) has reached an agreement with Nokia for settling a damages
claim against Ericsson. The settlement relates to events that were
the subject of a 2019 resolution with the U.S. Department of
Justice (DOJ) and U.S. Securities and Exchange Commission (SEC) of
investigations into Ericsson's violations of the U.S. Foreign
Corrupt Practices Act (FCPA).
As communicated in 2019, the resolution with DOJ related to
criminal charges of books and records and internal controls
violations of the FCPA in five countries including in Djibouti and a guilty plea to one instance of
bribery in Djibouti. The
resolution with the SEC related to allegations of violations of the
books and records and internal controls provision of the FCPA in
six countries and of the bribery provision of the FCPA in three of
these six countries.
The agreement with Nokia contemplates the payment by Ericsson of
a total settlement amount of EUR 80 m
(SEK 0.8 b equivalent). The amount
reflects uncertainty, risk, expense, and potential distraction from
business focus associated with a potentially lengthy and complex
litigation. The settlement will have an impact of EUR 80 m on EBIT and EUR
26 m on cashflow in Q2 2021. The remainder of the settlement
amount will be made in similar installments in 2022 and 2023
respectively, impacting cash-flow. The settlement amount will be
recorded as Other Operating Expenses under Segment Emerging
Business and Other. Further details of the terms of the settlement
are confidential.
Ericsson has a zero-tolerance policy for corruption and has in
recent years worked hard to strengthen its Ethics and Compliance
program and to build a culture of compliance.
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About Ericsson
Ericsson enables communications service providers to capture the
full value of connectivity. The company's portfolio spans Networks,
Digital Services, Managed Services, and Emerging Business and is
designed to help our customers go digital, increase efficiency and
find new revenue streams. Ericsson's investments in innovation have
delivered the benefits of telephony and mobile broadband to
billions of people around the world. The Ericsson stock is listed
on Nasdaq Stockholm and on Nasdaq New York. www.ericsson.com
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Ericsson announces
settlement with impact in second quarter 2021
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