Ericsson money was used to bribe Greek officials: report

STOCKHOLM Wed Apr 2, 2014 9:06am EDT

Related Topics

STOCKHOLM (Reuters) - Swedish mobile telecoms equipment maker Ericsson paid 116 million Swedish crowns ($18 million) to a commercial agent, money which was then used to bribe Greek officials to secure a deal for Ericsson in 1999, Swedish radio reported on Wednesday.

In an interview, former Ericsson employee Liss-Olof Nenzell told Swedish radio that "politicians, generals and high-ranking state officials" had received the Ericsson money.

Ericsson said in a statement that it had paid money to a commercial agent, but did not know what became of it.

The Swedish company used to employ local commercial agents in many countries in a bid to increase sales.

"We have zero tolerance for bribes and corruption. At the time, we used agents, but we don't anymore because it is a system that lacks transparency," it said in an emailed statement.

"We know that a payment was made to an agent, but we don't know what happened with the money after that. We really hope that the money wasn't used for bribes, but we don't know for sure."

The Greek order was for the Ericsson airborne surveillance system Erieye and was worth 4.9 billion Swedish crowns ($759 million). Ericsson has subsequently sold its defense business to Swedish group Saab.

Alf Johansson, chief public prosecutor at the National Anti-Corruption unit of the Swedish Prosecution Authority, said he was looking into the matter and had asked Greek investigators for information.

He added, however, that he was only interested in potential crimes committed after July 1, 2004, as crimes before that date would have passed the statute of limitations, meaning they could not be prosecuted.

Antonis Kantas, deputy armaments chief at the Greek Defense Ministry between 1997 and 2002, has admitted to taking $16 million in bribes relating to arms deals with foreign companies and mentioned Ericsson in connection with bribes in his court testimony.

Separately, Ericsson has accused Nenzell of embezzlement and sued him to recover money. Reuters was unable to contact Nenzell for comment, but he has denied the allegations in the past.

At Ericsson, Nenzell was responsible for setting up and handling a payment system used for agents, Ericsson said.

"I haven't taken any money. I can certainly guarantee that," Nenzell told Dagens Industri last year.

($1 = 6.4532 Swedish Crowns)

(Reporting by Sven Nordenstam, Additional reporting by Harry Papachristou in Athens; Editing by Mark Potter)

FILED UNDER: