Ericsson is being sued by 37 of its shareholders for a combined US$170 million.
Business daily Dagens Industri reports that the action is coordinated, but that each shareholder – among them a number of investment firms and pension funds – have filed separate lawsuits with a Swedish court demanding compensation for losses.
The complaint arises from the depression in the value of Ericsson’s stock following revelations of improper conduct by the vendor in Iraq revelations of improper conduct by the vendor in Iraq that may have included bribe payments to the terrorist group known as ISIS (Islamic State). Ericsson last year launched an internal investigation into the allegations.
CEO Boerje Ekholm in particular has been blamed by shareholders for his handling of both the scandal and the subsequent investigation. On 16th February 2022, Dagens Industri published an interview with Ekholm in which he revealed the existence of the internal probe relating to potential misconduct in Iraq. Following this disclosure, Ericsson shares fell sharply in value and currently sit at around half of their former price.
Reuters reports that in May this year, Nasdaq Stockholm published its review of Ericsson’s public disclosures relating to the investigation, and concluded that it could not “come to the conclusion that the content of [Ericsson’s] report was such that a reasonable investor would have used such information as part of his/her investment decision."
In a statement, Ericsson said that it “disputes the claims in their entirety and intends to defend itself vigorously in this matter, which is unprecedented in Swedish litigation and contrary to fundamental principles of Swedish corporate law.”