Charlotte Street Partners



The Ericsson Speedway to ruin

Written by Maria Julia Pieraccioni, senior associate
Edited by Scott Reid, associate partner
28 February 2022

Good morning,

It is often said that the best way to solve a white-collar crime is to follow the money.
In the case of Swedish network giant Ericsson, following the company’s outbound money has recently led the International Consortium of Investigative Journalists (ICIJ) down a rabbit hole of bribes, kidnapping, and equipment smuggling stretching from ISIS-controlled territories to South America. On Sunday, ICIJ published a chilling exposé of the media colossus, evidencing the company’s years of concealed bribery and fraud in Iraq and war-torn regions in the Middle East controlled by ISIS.
Seventy three pages of an internal investigation report at Ericsson were leaked to the Consortium, which partnered with The Washington Post and SVT in Sweden, as well as an additional 28 media partners to dissect and analyse the report. Known as the Ericsson List, ICIJ and its partners spent months authenticating the leak and its contents, interviewing ex-employees, government officials, contractors and other industry insiders. As they scoured through the documents, following the money proved harder than they thought. According to spreadsheets contained in the report, tens of millions of dollars in payments were made in sham contracts, inflated invoices and falsified statements to sustain the company’s business in Iraq. Much of this money ended up in the hands of middlemen, so-called consultants, regional defence specialists, subcontractors—your typical nice guys with nebulous job descriptions and tentacled insider connections.
After Mosul fell to ISIS in 2014, a senior Ericsson lawyer had voiced his concerns to upper management about continuing the company’s operations in Iraq, but was quickly shut down, saying that leaving the country would “destroy” Ericsson’s business in the region. Worse yet, as the company’s employees continued to work in the region, one even alleged he was kidnapped by ISIS fighters over bribe money and was released a month later with a hunch that his manager had paid for his return home.
Among the revelations from the Ericsson List, one that sticks out is that the company sought permission from the Islamic State to work in ISIS-controlled cities and paid to smuggle equipment through a route known as the “Speedway”, to avoid official government checkpoints.
Why war-torn Iraq was so central to Ericsson’s business is hard to tell. The company’s chief executive Borje Ekholm has declined to provide comment to outlets who investigated the leak. His last comment was made last week, when rumours were spreading that Ericsson was dealing in shady business, before anyone knew what that business was and prior to the ICIJ’s report. In it, he admitted that the company’s internal probe had found “serious breaches of compliance rules and the company’s code of business ethics”, but that ultimately, “the probe could not determine the final recipients of the money”. 
Ericsson was chosen over Huawei to lay the UK’s 5G network nationwide for fears the Chinese telecom company posed security concerns. After all, who ever said anything about integrity?


President Putin has ordered Russia’s nuclear deterrent forces on to high alert, citing NATO’s “aggressive statements” about his invasion of Ukraine. The nuclear deterrent forces will be placed into a “special regime of combat duty”, even as Ukrainian president Volodymyr Zelensky signalled he would agree to discuss peace talks. (£)
The British government has confirmed new anti-corruption measures and that “dirty money” confiscations will be fast-tracked by ministers, after Prime Minister Boris Johnson came under pressure for the UK’s light touch on sanctions. It was revealed in Parliament last week that the government had targeted only two of the 35 Russian oligarchs hiding assets in the UK on a list drawn up by opposition leader Alexei Navalny.
Russian ships could have their access to UK ports restricted, as anger grows on the Orkney Islands. A Russian-owned tanker is due to berth at Flotta to collect crude oil on Tuesday, and a UK government spokesman said that Westminster is in talks with the Scottish government to draw up a sanction plan that would restrict Russian access to UK ports.

Business and economy

BP is set to offload its 19.75% stake in state-owned Russian oil giant Rosneft“with immediate effect” following Russia’s invasion of Ukraine. The statement issued by BP said that Russia’s invasion of Ukraine caused the company to “fundamentally rethink BP’s position with Rosneft”. BP chief executive Bernard Looney will resign from Rosneft’s board, alongside Bob Dudley, its other BP Rosneft director.
Roman Abramovich announced on Saturday he will cede day-to-day management of Chelsea FC to its charitable foundation. The Russian-Israeli businessman’s move comes after Russia’s invasion of Ukraine caused many to call for targeted sanctions by the West on oligarchs linked to President Putin. (£)
Norway’s sovereign wealth fund will dump all its Russian holdings following Russia’s invasion of Ukraine, Prime Minister Jonas Gahr Stoere announced on Sunday during a press conference. Norway’s wealth fund’s Russian assets consist of shares in 47 Russian companies and government bonds worth $2.83 billion, according to the Norwegian government.

Columns of note

Christina Lamb widens the lens of the conflict in Ukraine in her comment for The Times. She takes it back fifteen years, arguing that Putin’s ambition for Ukraine and to exhume the glory of the old Soviet Union has been years in the making. For more than a decade, the Russian president has been investing in hypersonics, ballistics, cyberwarfare and tank technology, waiting for the occasion to use them —a silent growth in military sophistication akin to Hitler’s in between world wars. However, Lamb comments that he is far from the only despot to be using this playbook. According to Freedom House, only 20% of the world’s population lives in free countries, making the case for years of declining global freedom and a current “democratic recession”. (£)
Rana Foroohar sheds light on an often overlooked battlefield in her piece for the FT this week—financial markets. According to Foroohar, the war in Ukraine marks a turnkey moment for financial markets: where in the past they reacted to geopolitical movements, they will now be where financial empires rise and fall. One of the lasting consequences of the Russo-Ukrainian war will be the “quickening of the shift to a bipolar global financial system—one based on the dollar, the other on the renmimbi”, according to the author. She also adds that while China squirms at the sight of its “friend without limit” going to war, it has longed for a post-dollarised world order for decades. (£)


The week ahead

Amidst the unfolding invasion in Ukraine, world markets and leaders alike will be looking with apprehension at the flurry of key economic reports and world events this week.
Monday will kick off a banner week in political events. French president Macron is expected to announce his candidacy for the presidential elections due in April, while the UN Environment Assembly will meet in Nairobi, Kenya to begin negotiations on a global plastic waste treaty, and the UN Human Rights Council will kick off its 49th session in Geneva, Switzerland. The day will also see the publication of the British Retail Consortium’s monthly economic briefing and results from the Bank of Ireland.
While market analysts will be watching numerous corporate results due on Tuesday, political analysts will be watching president Joe Biden’s first annual State of the Union address to Congress in Washington, as well as see the United Arab Emirates assume the presidency of the UN Security Council for March. The EU’s flash eurozone inflations data and monthly unemployment figures will be overcast on Wednesday by Federal Reserve Chair Jay Powell’s testimony to the House Committee on Financial Services.
On Thursday, Birmingham Erdington voters will flock to the polls to elect their new MP, following the tragic death of Labour MP Jack Dromey, while the ‘Schengen Council’ of home affairs ministers meets in Brussels. Results from the London Stock Exchange Group, Taylor Wimpey, and Schroders are also expected.
Friday wraps up the week with the inauguration of the 2022 Paralympic Winter Games in Beijing.

What’s happening today?

Ramsdens Holdings Plc
Challenger Energy Group plc
Final Dividend Payment Date
Compass Group plc
Final Results
BATM Advanced Communications Ltd
Bunzl plc
CentralNic Group plc
GlobalData plc
Greencoat Renewables plc
Kitwave Group plc
Sareum Holdings plc

Interim Dividend Payment Date
Albion Enterprise VCT plc
Alternative Income REIT
Bankers Investment Trust plc
BMO Commercial Property Trust Ltd
Ecofin Global Utilities & Infrastructure Trust plc
Ediston Property Investment Company plc
EJF Investments LtdForesight Solar Fund Ltd
Hansa Investment Company Limited
Hansa Investment Company Limited
Henderson International Income Trust plc
NB Private Equity Partners Ltd
Polar Capital Global Financials Trust plc
Polar Capital Global Healthcare Trust plc
Interim Results
Oncimmune Holdings plc
Quarterly Dividend Payment Date
City Of London Investment Trust
Custodian REIT plc
Picton Property Income Limited
Q4 Results
Kosmos Energy Ltd
UK Economic Announcements
(07:00) Nationwide House Price Index
Intl Economic Announcements
(14:45) Chicago PMI (US)

Source: Financial Times

did you know

According to Merriam-Webster, the word ‘colleague’ is most commonly used with such words as ‘fellow’, ‘esteemed’, and ‘distinguished’. The word ‘co-worker’ is often used with such words as ‘difficult’, ‘bossy’, and ‘annoying’. (Source: @qikipedia)

Parliamentary highlights

House of Commons

Oral questions
Home Department (including Topical Questions)
Consideration of Lords Amendments to the Police, Crime, Sentencing and Courts Bill
Firefighters’ pension scheme
Westminster Hall debate
e-petitions 272087 and 575833, relating to online abuse

House of Lords 

Oral questions
Nationality and Borders Bill – report stage (day 1)
Higher Education Reform
Building Safety Bill – committee stage (day 3)

Scottish parliament 

No business scheduled.  

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