Ericsson books $220M provision to settle DoJ complaint - Mobile World Live

Ericsson books $220M provision to settle DoJ complaint

12 JAN 2023

Ericsson set aside SEK2.3 billion ($220 million) in relation to a potential resolution with the US Department of Justice (DoJ), after the agency alleged the vendor had breached terms of a settlement agreed in 2019 involving a corruption investigation.

The Swedish vendor stated the charge would be booked in its Q4 2022 figures, which are due to be released later this month.

Ericsson added it had not reached a resolution with the DoJ regarding the alleged breaches and discussions are ongoing.

The provision will be booked as Other Operating Expenses, in the income statement of Segment Other.

In October 2021, the DoJ raised a complaint stating Ericsson had breached obligations by failing to provide certain documents and factual information relating to the settlement in 2019.

Ericsson had agreed to pay $1 billion to the US government following the corruption probe, during which the vendor admitted to paying millions in bribes and falsifying its books between 2000 and 2016.

Reliable estimate
Ericsson stated it believes the sum set aside to settle the matter “is a sufficiently reliable estimate of the financial penalty associated with any potential breach resolution”.

As well as paying $1 billion, the company agreed to a three year independent programme, which was extended by another year in December 2022.

“This provision also includes estimated expenses for the previously-announced extended” monitoring, added Ericsson, while stating its internal investigations and cooperation regarding the 2019 corruption investigation remains ongoing.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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