Thirty-seven Ericsson shareholders are suing the Swedish telecoms company for a combined 1.8 billion Swedish crowns ($170 million or roughly Rs. 1,405 crore), saying its CEO’s disclosure of activities in Iraq depressed the stock, business daily Dagens Industri reported on Friday.
Ericsson and CEO Boerje Ekholm have been criticised heavily in the past year for their handling of an internal probe into the company’s operations in Iraq and a scandal involving potential payments to the Islamic State.
The shareholders, including several investment firms and pension funds, have filed separate lawsuits with a Swedish court but their actions are coordinated, the paper reported.
“Ericsson disputes the claims in their entirety and intends to defend itself vigorously in this matter, which is unprecedented in Swedish litigation and contrary to fundamental principles of Swedish corporate law,” the company said in an emailed statement.
The Swedish court did not respond after business hours to a request for comment.
Dagens Industri said the shareholders are demanding compensation for a sharp drop in Ericsson shares since February 16, 2022, after the paper published CEO Ekholm’s disclosure in an interview of an internal report about company activities in Iraq. The share price has halved since then to 52.71 crowns on Friday.
In May this year, Nasdaq Stockholm concluded a review of the company’s public disclosures concerning the report.
It found that it “cannot come to the conclusion that the content of the report was such that a reasonable investor would have used such information as part of his/her investment decision.”
© Thomson Reuters 2023