Telecom network maker Ericsson said on Friday that the company is facing a probe by the US authorities over an alleged corruption charge.
Ericsson said it was co-operating with U.S. authorities in an inquiry over possible corruption dating back three years.
“We will not provide any detailed comments on the request as such, but can say that it relates to Ericsson’s anti-corruption program and questions related to the Foreign Corrupt Practices Act. Ericsson cooperates with US Authorities and works diligently to answer the questions,” said Ericsson in a statement.
A Reuters report said Ericsson CEO Hans Vestberg, who could not retain its revenue and profit growth in recent quarters, will be under pressure due to the alleged corruption charges.
The Swedish telecoms equipment maker has been under fire in local media who have questioned the pay and leadership of CEO Hans Vestberg after weak results in April which sent Ericsson shares down by 15 percent in one day.
Ericsson issued a statement on Friday after Swedish daily Svenska Dagbladet (SvD) reported that the company was being investigated over possible corruption in its China business.
Ericsson said it had initially received questions from U.S. authorities in March 2013, adding this had been reported by media at the time.
“Ericsson cooperates with U.S. Authorities to answer these and additional questions,” said Ericsson in a statement.
Media reports at the time said U.S. authorities were investigating Ericsson’s business practices in Romania.
Hans Vestberg, chief executive officer of Ericsson since 2010, has faced questions over his use of a corporate jet to travel to sports events and his appointment as chair of Sweden’s Olympic Committee (SOC) when Ericsson is trying to cut costs and rethink its strategy.
Han Vestberg has said his trips were with clients and not in breach of Ericsson policy and that the SOC role would not distract him from his job as chief of Sweden’s largest exporter.
SvD said the U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) are investigating Ericsson, whose shares are listed in Stockholm as well as on Nasdaq.
DOJ declined to comment on the case, and SEC spokespeople did not immediately return a request for comment outside regular business hours.
Findings of corruption by U.S. authorities may result in hefty fines for companies under the Foreign Corrupt Practices Act.
In February, mobile operator Vimpelcom agreed to pay $795 million to settle U.S. and Dutch investigations into a bribery scheme in Uzbekistan. Roughly half of that amount was to U.S. authorities. However, other penalties imposed on companies have been relatively modest.
Hans Vestberg is currently in the process of revamping the telecom network maker with a slew of new appointment, to take on the combined Nokia and Alcatel-Lucent unit and Huawei.
Baburajan K