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Ericsson books 12B Swedish kronor charge in Q3 due to US probes

Telefonaktiebolaget LM Ericsson (publ) booked a provision of 12 billion Swedish kronor for the third quarter in relation to corruption investigations by U.S. authorities.

The provision includes expenses for anticipated monetary sanctions amounting to $1 billion, with the remainder slated to cover other costs to resolve the investigations.

Since 2013, the networking and telecommunications company has been cooperating with the U.S. Securities and Exchange Commission regarding its conduct. The U.S. Department of Justice also opened a probe in 2015 to look into the company's compliance with the U.S. Foreign Corrupt Practices Act, or FCPA.

The investigations, which cover a period up to the first quarter of 2017, revealed violations of the company's code of ethics and the FCPA in China, Djibouti, Indonesia, Kuwait, Saudi Arabia and Vietnam.

Ericsson said the breaches were the result of "several deficiencies," including a failure to react to red flags and inadequate internal controls that enabled certain employees to "actively circumvent internal controls for illegitimate purposes."

"We have to recognize that the company has failed in the past," said Ericsson President and CEO Börje Ekholm.

As of Sept. 25, US$1 was equivalent to 9.74 Swedish kronor.