Ericsson Shareholders Rebuke Leadership Over Handling of Iraq Corruption Probe
March 30 2022 - 4:37AM
Dow Jones News
By Dominic Chopping
STOCKHOLM--Ericsson AB shareholders used Tuesday's annual
general meeting to air their discontent at the company's handling
of a probe into corruption in Iraq.
The Swedish telecommunications equipment maker has been under
pressure in recent weeks after it disclosed that an internal
investigation had found evidence of historical corruption in Iraq,
including the company being unable to determine if certain payments
in the country fell into the hands of terrorist organizations.
Shares have lost around a quarter of their value since the
revelations and the disclosure has also led to criticism from the
U.S. Justice Department, which informed the company that its
disclosure of the Iraq probe prior to entering a deal over previous
bribery and accounting violations was insufficient.
At Tuesday's meeting, shareholders representing at least 10% of
Ericsson shares voted against discharging the board and president
from liability for the 2021 financial year, opening Chief Executive
Officer Borje Ekholm and the rest of the board to potentially be
held personally liable for their actions.
Under Swedish law, if at least 10% of shareholders vote against
discharging the board from liability with respect to their
management, they can be sued by the company and its investors.
Shareholders did, however, approve the board's re-election and
remuneration.
Speaking after the meeting, CEO Ekholm said he understood the
concerns raised by shareholders and said he was committed to
continue leading Ericsson in the transformation of the company and
its ethics.
"Borje and the executive team have the full support of the
board. We have made good progress but there is much still to do,"
Chairman Ronnie Leten said.
"During five years at the helm, Borje has led the focus on
ethics and compliance and executed the performance turnaround of
Ericsson," Mr. Leten said.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
March 30, 2022 04:22 ET (08:22 GMT)
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