Ericsson shares continued their declines this week after leaked documents alleged that the Swedish company had used its funds to bribe ISIS as a means to continue its sales in territory occupied by the terrorist group.
The news of corruption first broke on February 15 2022 and saw Ericsson shares take a dive of over 12%.
A report from Ericsson stated that an internal investigation by the company had discovered “serious breaches of compliance rules and the Code of Business Ethics” alongside “evidence of corruption-related misconduct.”
The report also revealed “payments to intermediaries and the use of alternate transport routes in connection with circumventing Iraqi Customs, at a time when terrorist organizations, including ISIS, controlled some transport routes.”
The company further claimed that its investigators were unable to uncover the eventual recipients of those payments.
Kidnapping and Extortion
However, the latest reports indicate that Ericsson also allowed its contractors in the region to be kidnapped by ISIS and subsequently abandoned them after demands for ransom were submitted to the company.
“He abandoned me, he turned off the phone and disappeared,” Ericsson contractor Affan told German public broadcaster NDR.
Affan was later released after a month of house arrest, with the Ericsson report claiming a company partner made unspecified arrangements to have him released.
The leaked documents were accessed by the International Consortium of Investigative Journalists and revealed allegations from 2019 against the telecommunications firm of bribery in ten countries.
ISIS Territory
Ericsson’s transport contractor reportedly used a faster “Speedway” through ISIS territory to avoid government checkpoints and smuggle products into areas held by the terrorist organisation.
According to the ICIJ, bribery payments were probably made along the route as a means of conducting Ericsson business in the region.
“Ericsson knew well what was going on. There is not a sane person who would deal directly with IS, they all do it through the subcontractors,” an anonymous senior telecoms official told an ICIJ partner.
“Militants would take a percentage from every cent paid in Mosul on any project or work. This is how they accumulated millions.”
Ericsson has not yet released an official statement on the latest release of allegations.