Ericsson has admitted that it may have bribed the terrorist group Islamic State in return for being allowed to use roads through Iraq.
The Swedish telecoms company's share price was down 13pc on Wednesday morning after it said investigators had uncovered evidence that payments were made for “use of transport routes in connection with circumventing Iraqi customs”.
Borje Ekholm, Ericsson’s chief executive, told the newspaper Dagens Industri: “What we see is that people have paid for road transport through areas controlled by terrorist organisations, including IS.
“With the means we have, we haven't been able to determine the final recipients of these payments.”
His comments followed a lengthy statement published by the company late on Tuesday, which said that several employees had been fired following the internal investigation.
It is a fresh embarrassment for the company after it was forced to strike a $1bn settlement with US authorities in 2019 over alleged bribery and corruption in Asia and the Middle East.
The company did not say whether the findings detailed on Tuesday were connected to those allegations.
Ericsson said its investigation, supported by a law firm, was prompted by “unusual expense claims” from its Iraq business in 2018.
The subsequent process examined the actions of staff and suppliers in the country from 2011 to 2019 and found “serious breaches” of the law and ethical guidelines.
Investigators found evidence of corrupt practices including the payment of bribes, handing cash to suppliers for undefined work, using suppliers to make cash payments and the payment of “inappropriate” travel and expenses.
“The investigating team also identified payments to intermediaries and the use of alternate transport routes in connection with circumventing Iraqi customs, at a time when terrorist organisations, including IS, controlled some transport routes,” the statement added.
“Investigators could not determine the ultimate recipients of these payments.
“The investigation could not identify that any Ericsson employee was directly involved in financing terrorist organisations.”
Ericsson said the way payments were handled had also created a risk of money laundering.
The company said it had used up “significant time and resources to understand these matters”.
Mr Ekholm added: “Financing terrorism is completely unacceptable and something we do not allow at all.”