Stockholm - Ericsson, the Swedish maker of wireless networks, said it has been cooperating with US authorities since receiving a March 2013 request to provide information on its operations and that it is working “diligently” to answer the questions.
Stockholm-based Ericsson said in an e-mailed statement Friday it wouldn’t provide details on the US request or on how the company is responding. Swedish newspaper Svenska Dagbladet reported Thursday that the Securities and Exchange Commission and the US Department of Justice are investigating Ericsson for suspected corruption, including at its operations in China.
“As a listed company, we always follow the requirements to publicly disclose any information about events that would have a material impact on the company or its finances,” Ericsson said Friday. The company is cooperating with US authorities to answer the questions, it said.
The report adds fresh fodder to critics of CEO Hans Vestberg, who’s contending with a sales slowdown, brutal price competition and forays into areas like television that haven’t yet borne fruit. He received an unusually blunt critique of his performance in May, when Helena Stjernholm, who heads Ericsson’s second-largest shareholder, Industrivaerden AB, said problems at the company are taking up more of her time, and that Ericsson “hasn’t performed as a share and neither has the company.”
Ericsson fell 2 percent to 62.25 kronor at 10:07 a.m. in Stockholm. The shares are down 24 percent so far this year.
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In May 2013, the company said the US SEC had started an investigation into its payment system used to win contracts in the 1990s, including orders in Romania.
The US review covers more recent activities in China as well as events from earlier years, the SvD reported, without saying how it obtained the information.
Ericsson last week said that Mats H. Olsson, a career company executive and former head of North East Asia, had left the company.
Ericsson is locked a global battle with rivals Huawei Technologies and Nokia in a market for phone-network equipment that’s showing little growth after much of the so-called fourth-generation networks have been built already in the US and China. Vestberg has carved out units targeting media and enterprise customers to expand beyond wireless networks to return to growth.
BLOOMBERG