Ericsson told the US Department of Justice about an internal probe into its business dealings in Iraq when settling separate issues in 2019, Reuters reported, as a major shareholder described a market sell-off in response to the news an overreaction.
The revelation comes days after the Swedish vendor disclosed the results of the investigation into its employees and suppliers’ conduct in Iraq, which caused a huge drop in the company’s share price.
Reuters noted its sources were under the impression US authorities had been made aware of the Iraq issue when Ericsson signed a settlement for a corruption investigation across a number of countries in 2019.
Among Reuters’ sources was Christer Gardell, managing partner of shareholder Cevian Capital, who told the publication although the company’s actions were unacceptable, the scale of the drop in market value was a strong overreaction.
As the fallout from Ericsson’s Iraq revelations continues, two legal companies in the US announced they were investigating potential violations of securities laws on behalf of shareholders.
Following Ericsson’s disclosure, the International Consortium of Investigative Journalists claimed the company had not fully addressed the questions put to it in relation to the issue and indicated it planned to publish its own findings alongside its partners soon.Subscribe to our daily newsletter Back