Comment regarding alleged corruption in South Africa
December 19, 2016
In an article in Svenska Dagbladet on December 19, it is alleged that Ericsson is under scrutiny for alleged corruption in relation to a contract with City of Johannesburg. Following the article, Ericsson wants to make the following comment:
In 2010 Ericsson and CitiConnect won an RFP with the City of Johannesburg for a so-called BOT contract (Build, Operate and Transfer) regarding the deployment of fiber networks. In this cooperation, Ericsson performed services for CitiConnect, who was the contracting party to the City of Johannesburg. In 2014, City of Johannesburg, terminated the agreement with CitiConnect, because the timetable had not been kept. After the termination followed an arbitration process between the City of Johannesburg, CitiConnect and Ericsson, which was concluded in 2015.
In connection with the termination of the contract an independent third-party audit was conducted and concluded that the value of the network was largely the same as the amount of the corresponding portion of the contract. We are aware that there have been reports in local media that this is not the case.
The project with the City of Johannesburg was the only time we have collaborated with CitiConnect. Our customers' operations and ownership is nothing we can comment; these are questions that should be addressed directly to them.
We have previously communicated that we cooperate with US authorities and are answering a number of questions related to the Foreign Corrupt Practices Act and related areas. We have also said that we cannot go into details about the questions, as it could affect or interfere with the work of the authorities.