By Dominic Chopping

 

STOCKHOLM--Ericsson AB shareholders used Tuesday's annual general meeting to air their discontent at the company's handling of a probe into corruption in Iraq.

The Swedish telecommunications equipment maker has been under pressure in recent weeks after it disclosed that an internal investigation had found evidence of historical corruption in Iraq, including the company being unable to determine if certain payments in the country fell into the hands of terrorist organizations.

Shares have lost around a quarter of their value since the revelations and the disclosure has also led to criticism from the U.S. Justice Department, which informed the company that its disclosure of the Iraq probe prior to entering a deal over previous bribery and accounting violations was insufficient.

At Tuesday's meeting, shareholders representing at least 10% of Ericsson shares voted against discharging the board and president from liability for the 2021 financial year, opening Chief Executive Officer Borje Ekholm and the rest of the board to potentially be held personally liable for their actions.

Under Swedish law, if at least 10% of shareholders vote against discharging the board from liability with respect to their management, they can be sued by the company and its investors.

Shareholders did, however, approve the board's re-election and remuneration.

Speaking after the meeting, CEO Ekholm said he understood the concerns raised by shareholders and said he was committed to continue leading Ericsson in the transformation of the company and its ethics.

"Borje and the executive team have the full support of the board. We have made good progress but there is much still to do," Chairman Ronnie Leten said.

"During five years at the helm, Borje has led the focus on ethics and compliance and executed the performance turnaround of Ericsson," Mr. Leten said.

 

Write to Dominic Chopping at dominic.chopping@wsj.com

 

(END) Dow Jones Newswires

March 30, 2022 04:22 ET (08:22 GMT)

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