Ericsson Sells Of Russian Customer Support Business; Agrees To Regulatory Extension Of Monitoring For FCPA Violations

  • Ericsson's ERIC Russian subsidiary agreed to divest its local customer support business in Russia to a Russian company owned by former operational managers of its Russian subsidiary.
  • The transaction includes transferring 40 Ericsson employees and certain assets and contracts related to the business.
  • The customer support business is a local business engagement that does not involve exporting hardware, software, or related services to mobile operators in Russia.
  • Following Russia's invasion of Ukraine, Ericsson suspended operations and deliveries to customers in Russia and an orderly wind-down under applicable sanctions
  • Ericsson informed its 400 employees in Russia of layoffs who departed following the discontinuation of operations.
  • Going into 2023, Ericsson expects to have a small presence in Russia on a regional basis. 
  • A legal entity owned by Ericsson will continue to be registered to complete the wind-down and fulfill legal, contractual, and administrative requirements.
  • Ericsson agreed with the U.S. Department of Justice (DOJ) and SEC to extend the company's Independent Compliance Monitor term for one year to June 2024.
  • In 2019 Ericsson forged an agreement with the DOJ and the SEC to resolve violations of the FCPA
  • U.S. prosecutors determined Ericsson violated a $1.06-billion settlement agreement reached in 2019 over bribery allegations in five countries. Ericsson agreed to engage an independent compliance monitor for three years while strengthening its culture and establishing a rigorous anti-corruption, compliance, and controls program.
  • Price Action: ERIC shares closed lower by 1.21% at $6.52 on Wednesday.
  • Photo Via Company
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