Ericsson investors revolt over ISIS payments scandal: ‘We don’t trust them’

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Shareholders of Ericsson are revolting in opposition to the Swedish telecom large’s executives – together with prime boss Börje Ekholm – after their admission that the company could have inadvertently made payments to ISIS.

European activist funding agency Cevian Capital and Norway’s $1.3 trillion sovereign wealth fund, two of Ericcson’s prime 10 shareholders, will vote in opposition to a measure shielding Ekhold and different board members from legal responsibility over the scandal.

Last month, Ekholm famous “unusual expenses dating back to 2018” because the company tried to achieve entry to truck routes in Iraq that had been managed by terrorist teams, together with ISIS. Ekholm stated the company hasn’t decided who was the “final recipient” of the money.

“Basically, we don’t trust them. We wonder whether they’re hiding something, otherwise they would come clean. The governance is dysfunctional,” one particular person recognized as a top-10 shareholder of Ericsson stock instructed the Financial Times.

Norway’s fund instructed the outlet it “cannot discharge based on the information we have now.”

Meanwhile, Cevian addressed its plan vote in opposition to the legal responsibility discharge by noting it “still [lacks] the information necessary to make an informed judgment of what went wrong, why, and who should be held responsible.”

Some shareholders plan to vote in opposition to a measure shielding Ericsson CEO Borje Ekholm and others from legal responsibility over the scandal.
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The strain marketing campaign over Ericsson administration’s dealing with of the saga is prone to fail – with the telecom agency’s three largest shareholders all anticipated to vote to discharge the executives from legal responsibility, in response to FT.

In a separate initiative, distinguished proxy advisory corporations Glass Lewis and ISS are pushing for shareholders to vote in opposition to Ekholm and different members of the board of administrators.

Ericsson on Tuesday declined to touch upon the shareholder strain.

Ericsson shares are down about 25% since mid-February, when Ekhold first disclosed the incident. Earlier this month, the Justice Department accused Ericsson of violating a $1 billion deferred prosecution settlement involving corruption allegations imposed in 2019 by failing to reveal details about its probe into the possibly shady payments.

Ericsson has expressed help for Ekholm, arguing the company has improved its ethics requirements since 2017 regardless of the scandal

“CEO Börje Ekholm has the full confidence of the board, not only in regard to driving the company’s performance, but also in regard to the ethical and compliance transformation of the organization, which he continues to lead,” the company stated in a press release earlier this month.

Ekhold initially mentioned Ericsson’s findings in an interview with newspaper Dagens Industri. The company additionally elaborated in a prolonged Feb. 15 assertion concerning the scandal.

“The investigating team also identified payments to intermediaries and the use of alternate transport routes in connection with circumventing Iraqi Customs, at a time when terrorist organizations, including ISIS, controlled some transport routes,” the company’s assertion stated.