Swedish telecommunication company Ericsson welcomed a new chief legal officer in a statement from its board of directors, ahead of its annual general meeting on March 22.
First appointed on March 16, Scott Dresser today officially succeeds Xavier Dedullen as Ericsson’s chief legal officer, and will lead the review of the investigation related to the company’s operations in Iraq. Dedullen had been scheduled to leave his role on March 20 but will remain with Ericsson for a transition period.
Dresser has had over 30 years of legal experience serving at Veon, Virgin Media, White Mountains Capital, and law firms including Lord Day & Lord, and Morgan Lewis.
The board of directors also expressed “full confidence” in Ericsson’s chief executive officer, Börje Ekholm.
The statement noted that Ericsson reached a resolution with the DOJ in 2019, and is currently operating under a monitorship and deferred prosecution agreement.
“While Ericsson since 2017 has taken significant steps in improving the culture of ethics and compliance,” wrote Ronnie Letens, chairperson of the Ericsson’s board of directors, in the statement. “Further efforts are underway to help ensure that the company operates at all times ethically and with integrity including in relation to the current issues before the DOJ.”
In 2019, the Swedish telecommunication company settled a multi-year corruption investigation conducted by the U.S. Department of Justice (DOJ) for US$1 billion. But in 2022, it admitted that it had breached the Deferred Prosecution Agreement by failing to tell the DOJ about payments for routes through ISIS-controlled territories to evade Iraq customs.
The company said that it could not determine the recipient of the payments, nor could it identify whether any Ericsson employee was “directly involved in financing terrorist organizations.”
Continuing its operations in Iraq has endangered the lives of Ericsson’s contractors. In one instance, ISIS captured Ericsson contractors and held them hostage, demanding a US$2.4 million ransom for permission to work in its territory.
Details of the investigation came to light after the International Consortium of Investigative Journalists (ICIJ) obtained a leaked document from 2019 that described an internal Ericsson corruption probe in 10 countries, including Iraq, between 2011 and 2019.
Following the news, Ericsson’s share price dropped by as much as 15 per cent in February.
The Ericsson CEO later confirmed that the investigation had found misconduct by its employees.
“Unusual expense claims in Iraq, dating back to 2018, triggered a review that uncovered compliance concerns about breaches of the company’s Code of Business Ethics,” read a public statement issued by Ericsson on Feb. 15.
“The investigation revealed misconducts including monetary donation without a clear beneficiary; paying a supplier for work without a defined scope and documentation; using suppliers to make cash payments; funding inappropriate travel and expenses; and improper use of sales agents and consultants,” the statement said.
Several Ericsson employees were “exited from the company” and others have faced remedial actions.
The company is now working with external counsel to review the findings and apply the appropriate measures.
Ericsson is the chief purveyor of 5G telecommunication equipment for Rogers in Canada. It’s also a major hardware vendor for many telcos in the U.S. and Europe.
