Shulou(Shulou.com)11/24 Report--

CTOnews.com, January 15 (Xinhua)-- Ericsson said on Thursday that it will account for 2.3 billion Swedish kronor (1.48 billion yuan) in reserves to deal with possible fines for violating the 2019 settlement agreement reached by the United States.

Ericsson said that Ericsson had not yet reached a resolution with the US Department of Justice (DOJ) on the alleged violations and that discussions were ongoing.

Some analysts expect Ericsson to face a fine equivalent to $1 billion (currently about 6.72 billion yuan) paid in 2019 as part of the settlement.

"this is an incredible result because the market has always thought they will be fined $1bn to $2bn," JPMorgan analysts said in a report.

Background:

Ericsson signed a deferred prosecution agreement (DPA) in 2019 to address violations of the Foreign corrupt practices Act (FCPA) related to ISIS misconduct prior to 2017. The agreement provides that if the company violates its DPA obligations, it may be sued for historic FCPA violations covered by DPA.

The company announced in October 2021 and March 2022 that the U.S. Department of Justice informed it that it failed to provide DOJ with detailed documents and information in a timely manner, nor did it adequately report certain information related to internal investigations related to the 2019 events to DOJ.

Since the entry into force of DPA, DOJ has not charged or charged Ericsson with any new criminal misconduct.

Ericsson settled the "bribery" allegations with US authorities in 2019 and agreed to a three-year review. But it failed to fully disclose detailed internal findings, leading to more regulatory scrutiny. Last month, it agreed to extend its independent compliance supervisor until June 2024.

CTOnews.com found that since the company disclosed details of the investigation, its shares have fallen nearly 1/3 as investors worry about huge fines imposed by the US Department of Justice and the Securities and Exchange Commission.

The Swedish telecoms equipment maker said it believed the reserve was sufficient for financial penalties. The charge will be included in the fourth-quarter results to be announced later this month.

Ericsson said: "the company's internal investigation into the allegations in the 2019 Iraq-related internal investigation report and its cooperation with the authorities are still ongoing."

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