Ericsson Ex-CFO Accused of Tax Evasion

The telecom-equipment manufacturer insists that ''there was never any intent to evade tax control or taxes'' through the company's since-abandoned ...
Stephen TaubApril 21, 2005

A Swedish prosecutor charged six current and former executives of telecommunications-equipment manufacturer Ericsson with tax evasion, reported the Associated Press. Included among them is the company’s former chief financial officer, identified by the AP as Carl Vilhelm Ros.

The six individuals and a former Ericsson accountant were also charged with filing false invoices worth about 3.3 billion kronor ($470 million) between 1998 and 1999, according to the wire service, citing Lage Carlstrom, chief prosecutor for Sweden’s economic crimes bureau. In documents filed in Stockholm District Court, Carlstrom asserted that the invoices were filed to hide other payments, the wire service added.

American depositary receipts for the telecom equipment company, with a current value of about $45 billion, trade on the Nasdaq Stock Market.

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“The fact that charges have been laid is not in itself a reason to reassess the confidence we have in those accused individuals who remain employees of Ericsson,” insisted president and chief executive officer Carl-Henric Svanberg, in a statement.

He elaborated that the charges concern technical accountancy issues related to Ericsson’s since-abandoned system for payments to commercial agents. “The public prosecutor takes the view that the system was designed to evade tax control,” said Svanberg.

“The company agrees that the system led to misunderstandings with the authorities and therefore was flawed,” Ericsson added in its press release. “However, it is clear that there was never any intent to evade tax control or taxes in either the introduction or operation of the system.”

The telecom manufacturer did note that several documents seized during the investigation had turned out to be falsified. “Ericsson has, related to the investigation, filed a criminal complaint in Switzerland against a former employee for misappropriation of funds, with an alternative charge of embezzlement,” it added.

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