Sweden’s Ericsson said Wednesday that US authorities have found its disclosures about an internal inquiry into its conduct in Iraq, including suspected bribes to the Islamic State group, “insufficient”.
The news from the telecom equipment maker sent shares tumbling more than 10 percent as the Stockholm stock exchange opened.
The company’s value had already taken a beating in recent weeks over the anticipated publication of a media investigation coordinated by the International Consortium of Investigative Journalists (ICIJ).
It revealed an internal Ericsson 2019 investigation that was never made public, identifying possible corruption over many years in the group’s Iraqi operations, including links to Islamic State.
The revelations were published in the media on Sunday, but Ericsson had previously released statements addressing the claims.
Ericsson had already paid one billion dollars to the US Department of Justice to close a case of corruption in five countries, as part of a “deferred prosecution agreement” (DPA).
The Stockholm-based company revealed last month that it had already handed over its internal investigation on Iraq to US authorities.
But the Department of Justice (DoJ) informed Ericsson on Tuesday “The disclosure made by the company prior to the DPA about its internal investigation into conduct in Iraq in the period 2011 until 2019 was insufficient,” the telecom giant said in a statement.
In addition, the DoJ determined the company had “breached the DPA” by failing to make further disclosures related to the investigation after the agreement was reached.
Ericsson said it was “in communication with the DoJ” about the case and looking to resolve the issue.
“At this stage it is premature to predict the outcome of this matter,” the company said.
Since the revelations first came to light, Ericsson shares have lost nearly a third of their value.