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.
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