Swedish prosecutors filed charges today against present and former employees of Ericsson (Sweden) for alleged evasion of tax control, which Ericsson believes do not have merit. President and CEO Carl-Henric Svanberg stated, "The fact that charges have been laid is not in itself a reason to reassess the confidence we have in those accused individuals who remain employees of Ericsson."
Ericsson said it feels a general obligation to its employees and business partners to clarify some facts and present its view of what has happened. The events leading up to the prosecution occurred between 1998 and 2000. The suit concerns technical accountancy issues related to Ericsson’s since-abandoned system for payments to commercial agents, which the prosecutor alleges was designed to evade tax control.
Ericsson said the system was introduced and later abandoned because the system led to misunderstandings with the authorities and, therefore, was flawed. However, the company maintains there was never any intent to evade tax control or taxes in either the introduction or operation of the system.
The document also comments on some remarkable circumstances that have arisen during the investigation. Some of these have been directed against Ericsson and may also have caused direct economic damage. In addition, they may have negatively affected the overall image of Ericsson.
During the investigation, it was revealed that several seized documents were falsified and that someone in this way had attempted to hide the facts. Related to the investigation, Ericsson has filed a criminal complaint in Switzerland against a former employee for misappropriation of funds, with an alternative charge of embezzlement.
Finally, Ericsson confirmed the Swedish National Economic Crimes Bureau is also investigating another set of events concerning gross tax fraud wherein two Ericsson employees are suspected of involvement, related to a multimillion-dollar payment in 1999 from LME to a foreign bank, made on behalf of one of Ericsson’s subsidiaries under an agreement.
