Swedish pensions and insurance group Folksam says it is demanding answers from Swedish telecoms company Ericsson over the US corruption case it resolved with US authorities in December, in which staff were found to have engaged in bribery.
Folksam, which has SEK3.84bn (€365m) of Ericsson shares amounting to 1.25% of the company’s share capital, said in a statement that so far, it had been difficult to understand what had happened at the company and it needed more information from Ericsson.
“But obviously it is a structural problem when a company and its management are not clear internally and externally about what matters,” it said.
Folksam said Ericsson was one of the companies that it and its municipal pensions subsidiary KPA Pension were focusing on as owners, adding that it never accepted businesses that put short-term potential profits ahead of ethics and legislation.
“We have previously thought that Ericsson has been undertaking ambitious anti-corruption work, but it is obviously not enough,” the pensions and insurance firm said.
Folksam said it contacted the telecoms company in December to set up a meeting at the beginning of this year to discuss what had happened and what action to take.
“There have been reports that employees with links to the bribes remain within the organisation. We want to know more about this,” it said. Other questions Folksam said it wanted to put to Ericsson were what the independent reports conducted over the years at the company had revealed, and whether this could be reported at the next annual general meeting.
Ericsson announced in early December that it entered into a three-year Deferred Prosecution Agreement with the US Department of Justice, one condition of which is a fine payment of more than $520m.
The scandal-hit firm said charges related to accounting violations of the Foreign Corrupt Practices Act in five countries, and that its Egyptian subsidiary had pleaded guilty to bribery charges in Djibouti.
Börje Ekholm, Ericsson’s chief executive officer, said in the statement that reaching a resolution with the US authorities would allow the company “to close this legacy chapter”, move forward and build a stronger company.
Folksam said the Swedish Prosecution Authority had started its own investigation into the bribery allegations.
On the question of whether it could continue as an Ericsson shareholder, Folksam said its strategy was to be an owner that made demands of its holdings.
“As it now appears at Ericsson, anti-corruption work seems to be high on the agenda and we believe that we can benefit by asking questions and making demands for transparency,” the pensions and insurance group said.