REG - Telefon AB Ericsson - Update on Deferred Prosecution Agreement

Telefonaktiebolaget LM EricssonAnnouncement

02/03/2022 11:00

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RNS Number : 3725D  Telefonaktiebolaget Lm Ericsson  02 March 2022

Update on Deferred Prosecution Agreement

On December 6, 2019, Ericsson entered into a Deferred Prosecution Agreement
(DPA) with the United States Department of Justice (DOJ). On March 1, 2022,
the DOJ informed Ericsson that 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. Furthermore, it determined that the company
breached the DPA by failing to make subsequent disclosure related to the
investigation post-DPA. The company is in communication with the DOJ regarding
the facts and circumstances of the breach determination and is committed to
co-operating with the DOJ to resolve the matter.

At this stage it is premature to predict the outcome of this matter.

Comments about the Iraq investigation

Based on our current review, we believe the situation described in the media
reports on the conduct of Ericsson employees, vendors and suppliers in Iraq,
going back to 2011 is covered by Ericsson's 2019 internal investigation.

As previously disclosed in our press release on February 15, 2022, Ericsson
invested significant time and resources to understand these matters. The
investments we have made in our Ethics & Compliance program enabled us to
identify and investigate the misconduct in Iraq.  The 2019 investigation,
which was supported by external legal counsel, conducted over the course of a
year, and involved the collection and review of a large amount of information,
found serious breaches of compliance rules and the Code of Business Ethics.

The investigation could not identify that any Ericsson employee was directly
involved in financing terrorist organizations.  Based on our current
assessment of the media reports, we do not believe they change this
conclusion.  We reiterate our commitment to investigate and take action to
address any new information, including further investigation as appropriate.

As a result of the investigation, several employees were exited from the
company and multiple other disciplinary and other remedial actions were taken.
This included closing gaps in our internal processes in the region and
incorporating lessons from the investigation into our ethics and compliance
program. Furthermore, Ericsson terminated a number of third-party
relationships and prioritized the Iraq country business for enhanced training
and awareness activities, policies and procedures, and third-party management
processes.

The Company has previously acknowledged publicly that it had failed to
implement sufficient internal controls, including internal controls designed
to deter and detect corruption. Over the last years, Ericsson has made
significant investments in compliance which has enabled the company to uncover
and address past misconduct.  Since the beginning of 2017 when we started the
turnaround of our company, we have invested extensively in enhanced compliance
systems and processes. We work hard to build a better Ericsson focused on
safeguarding a strong ethical and compliant culture throughout the entire
company. We continue to invest significant resources to improve our ethics and
compliance program and our speak-up culture to help prevent future misconduct.

Ericsson is under a compliance monitorship and the deferred prosecution
agreement with the US Department of Justice remains in effect.

 

MORE INFORMATION AT:

Contact person

Peter Nyquist, Head of Investor Relations

Phone: +46 705 75 29 06

E-mail: peter.nyquist@ericsson.com (mailto:peter.nyquist@ericsson.com)

Additional contacts

Stella Medlicott, Senior Vice President, Marketing and Corporate Relations

Phone: +46 730 95 65 39

E-mail: media.relations@ericsson.com (mailto:media.relations@ericsson.com)

Media

Corporate Communications

Phone: +46 10 719 69 92

E-mail: media.relations@ericsson.com (mailto:media.relations@ericsson.com)

This is information that Telefonaktiebolaget LM Ericsson is obliged to make
public pursuant to the EU Market Abuse Regulation. The information was
submitted for publication, through the agency of the contact person set out
above, at 05:45 CET on March 2, 2022.

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