The Swedish telecom giant Ericsson's shares have plummeted sharply following suspicions of bribery with Daesh in Iraq.
Over the course of Wednesday, more than SEK 40 billion ($4.3 billion) of the company's market capitalisation was gone, and share prices shrunk by 14.4 percent.
The market debacle followed inquiries by national broadcaster SVT, which has long questioned Ericsson's management and CEO Börje Ekholm about the company's activities in Iraq and the unpublished internal investigation conducted in 2019.
In response, the company chose to publish a press release with certain details of the investigation concerning Ericsson's actions in Iraq between 2011 and 2019. Among other things, the investigation found "serious breaches of regulatory compliance and breaches of the Code of Business Ethics" and "corruption-related misconduct".
According to Ericsson, the company suspects that it may have paid bribes to Daesh to gain access to "certain transport routes".
According to Ericsson, the company suspects that it may have paid bribes to Daesh to gain access to "certain transport routes".
The firm was asked why it had waited so long to release any information and whether the relevant authorities had been informed, but provided no further comment. Deputy Chief Prosecutor Martin Bresman with the National Police Unit Against Corruption said that he expected Ericsson to "report any criminal suspicions to the police or prosecutors".
According to Lars Nord, professor at the Department of Media and Communication Science at Mid Sweden University in Sundsvall, it has become increasingly common for companies, authorities, and institutions to try to take the edge off a critical investigation by publishing certain information in advance.
"You don't wait, but instead try and take control of this process by publishing parts of a story that you perceive as more favourable for your own company or your own organisation", Nord told SVT.
Per Nord, though, the very PR strategy of trying to disarm critical reviews with preceding publications is problematic.
"It is problematic for democracy, openness, and transparency. If you deliberately manipulate and succeed in distorting reality, if you successfully sell your own image of an event and that image is accepted by the media and in the public debate, it is of course a problem", Nord concluded.
Founded in 1876, the Stockholm-headquartered telecom giant Ericsson sells infrastructure, software, and services in information and communications technology and is seen as one of the leaders in 5G. It employs around 100,000 people and operates in over 180 countries.
*Daesh (ISIS/ISIL/"Islamic State") is a terrorist organisation banned in Russia and other states.