Teflon Dons of Telecoms 2: The Swedish Connection

This series of articles looks at how telecoms executives have not been held accountable for bribery and corruption rooted in their businesses. The companies involved have suffered damaging consequences but it doesn’t seem that board members, CEOs and CFOs have personally suffered any consequences as a result of the fines and penalties imposed on their companies following the wrongdoing that occurred during their tenure. Bribery convictions get all the publicity, but people don’t ask who set up the business structures which enabled them. Who authorised the millions of dollars that flowed through corrupt hands, year after year? And who else knew about it, but did nothing? For part one I focused on two former bosses of Ericsson. This article concerns two more executives at Swedish businesses whose influence has extended well beyond Sweden’s borders.

Lars Nyberg

Lars Nyberg was CEO of Telia/TeliaSonera from 2007 to 2013. The Organized Crime and Corruption Reporting Project (OCCRP) recently observed that a court in Stockholm upheld the acquittals for Lars Nyberg and two associates in a bribery case involving multi-million dollar payments made to Gulnara Karimova, daughter of the former President of Uzbekistan.

The three men were said to be responsible for Telia transferring USD320mn to Karimova in exchange for licenses to operate in Uzbekistan. They were acquitted by a lower court in February 2019, on the basis that they were not technically bribing Karimova because she was not in an official public role in charge of government decisions regarding telecoms.

Something here doesn’t add up! During the hearings, it was not disputed that Karimova was the beneficiary of the payments initiated by the accused. Telia, Vimpelcom and MTS all admitted to the US Department of Justice (DoJ) that they had bribed Karimova. Then, in 2017, a court in Uzbekistan sentenced Gulnara Karimova to 10 years’ imprisonment for bribery and money laundering. So everyone is guilty except the guys who are ultimately responsible for paying the bribes? I agree with chief prosecutor Kim Andrews, who told OCCRP:

I doubt that is what the lawmakers intended

Andrews also said:

Sweden is failing to live up to its international obligations to prevent precisely this kind of behaviour


We leave it to other European countries and the United States to clean up our mess

After Nyberg left Telia, the company reached an agreement with the DoJ and paid USD965mn in penalties. Despite the acquittals in Sweden, there may still be a case for Nyberg and the other defendants to answer in the USA. OCCRP revealed in September 2020 that US investigators, and others, have gathered evidence that was not part of the Swedish indictment, or the initial legal settlement.

Hans Vestberg

After covering the corruption scandals surrounding Ericsson CEOs in part one of this series, it may not surprise readers that we will return to Ericsson for yet more analysis of weak corporate governance with international implications. Ericsson was the employer of Hans Vestberg for 28 years, and he served them in various international managerial positions in China, Sweden, Chile, Brazil and the USA. In 2003, Vestberg became Senior Vice President and Head of Ericsson’s Global Services business unit, before he was appointed Executive Vice President in 2005. Vestberg became Chief Financial Officer in 2007, and then served as CEO of Ericsson from 2009 to 2016.


Previously I reported how bribery had occurred in China under Ericsson CEO Carl-Henric Svanberg, as admitted to the US Department of Justice (DoJ). It should be noted that whilst Carl-Henric Svanberg was accountable as CEO, other people were directly responsible for the bribes that were paid. During the period in question, Hans Vestberg was the Head of the Global Services business unit in which the bribery occurred. His governance responsibilities grew when he became CFO, then CEO. Is it conceivable that a man in his position, and with his experience, didn’t know how his team was winning so much business in China?

In 2006, Svenska Dagbladet reported that Mats Olssen, Ericsson’s top man in China, had business interests in an Ericsson supplier. This was a direct violation of company rules. A whistleblower reported the infringement to CEO Carl-Henric Svanberg, though Svanberg responded by giving the whistleblower early retirement and allowing Olsson to continue in post. Media articles also state that a 2005 report about Olssen went to Vestberg, who was Olssen’s boss. As the manager responsible, why didn’t he deal with the allegations? Did he do nothing and force the whistleblower to escalate the issues to the CEO? After Svanberg took no action, Olssen continued to operate in China during Vestberg’s tenure as CEO.

In February 2010, Hans Vestberg appointed two regional heads as members of the executive leadership team: Angel Ruiz, Head of North America, and Mats Olsson, Head of China and North East Asia. Vestberg said:

Angel and Mats have been instrumental in further growing our market share in North America and China.

By June 2016, Svenska Dagbladet reported that Ericsson China boss Mats Olsson had been escorted from Ericsson offices and the company had established an internal investigation to examine suspected corruption and inappropriate behaviour. We never found out whether Vestberg would take action on Olsson this time, because on 25 July 2016, in the middle of the Swedish vacation break, Ericsson’s Board of Directors announced that Vestberg, who was then President and CEO, would step down with immediate effect. No further explanation was given for Vertberg’s departure.

In June 2021, Expressen reported that the former Ericsson China boss Mats Olsson had been questioned on suspicion of being involved in Ericsson’s bribery in Asia. Expressen noted Olsson’s close connections to former CEOs Hans Vestberg and Carl-Henric Svanberg, as well as his links to the current CEO Börje Ekholm. Prosecutor Leif Görts said that more people may be questioned. Do you think one of those people should be Hans Vestberg?


There were bribes in the African country of Djibouti that were also paid during Vestberg’s tenure as CEO of Ericsson. Prosecutors announced that four former Ericsson Group employees have been charged with bribery in a case that is due to be heard in Solna District Court during April. The Ericsson employees are suspected of having bribed public officials in Djibouti between 2011 and 2012 with the goal of obtaining contracts for the sale of telecoms equipment.

According to the announcement, the alleged bribes consist of cash transfers totalling just over USD2mn which were paid to government officials via a consulting company in Djibouti. The accused were aware that the representative of the consulting company was also a public official in Djibouti. The consultant used his official position to influence the decision to buy equipment. The investigation is said to show that the cash transfers would be shared with other people in the country’s leadership.

Since the crimes were committed between 2011 and 2012 they will become time-barred in the near future, so intensive investigative work has been conducted by the police and prosecutors to have the investigation completed on time.

Separately, a former Ericsson employee, Affe Bereket, has been indicted in the USA in relation to the Djibouti bribes. To give you a flavour of the case, on 11 August 2011 Bereket sent an email saying that everybody in the management of the telecom company and the Ministry are…

…waiting their part of the cake

On 24th August 2011, Bereket and his co-conspirators caused Ericsson AB (a wholly owned subsidiary of LM Ericsson) to wire USD1,441,050 from an account in Dubai to an account in New York, from which the funds were wired to the consulting company in Djibouti. Bereket subsequently arranged further transfers of USD171,703 and USD545,230.

The Russian Laundromat Connections

In 2014, OCCRP reported its investigation of the Russian Laundromat. Between 2010 and early 2014, organized criminals and corrupt politicians in Russia moved USD20bn in dirty funds through the laundromat’s dozens of offshore companies, banks, fake loans, and proxy agents. The newly cleaned funds were then spread across Europe.

According to OCCRP, Ericsson AB received EUR4,301,650 (USD5,521,512.16) from LCM Alliance LLP at the start of April 2013. A representative of Ericsson told OCCRP that it does not have a business relationship with LCM Alliance and does not know why the payments ultimately came from that entity. However, the payments were made…

…under a customer contract related to telecom services and products

The customer used a payment service provider. The UK Companies House registration for LCM Alliance LLP shows it was registered at an accommodation address in London (along with over 1,000 other companies). The two company directors are two corporate nominees in the Seychelles. The BBC reported that a leak of more than 2,000 ‘suspicious activity reports’ (SARs) sent by banks to the US Financial Crimes Enforcement Network names more than 100 companies registered at that same address. Read more about LCM Alliance and the laundromat here.

In February 2014, Ericsson received around EUR1mn (USD1.1mn) from Valemont Properties. Ericsson confirmed this in an interview with newspaper Dagens Industri. Valemont Properties Ltd is a shell company which is registered in the UK but has declared itself to be dormant since it was incorporated in 2006, and was central to an investigation by authorities in Britain, Moldova, Latvia and Russia. Ericsson confirmed that it received the money as payment for supply to a third party:

What we know at present, the payment was received in connection to one of our customer contracts. We do not know why this payment was made by a different company and not the customer.

Johannes Persson, spokesperson for Ericsson, also told Dagens Industri that the information uncovered may lead the company to review its monitoring mechanisms and procedures. Ericsson has not disclosed details of the customer or the contract. However, Persson confirmed that the transaction was a downpayment for an existing customer.

In summary, the bribery in China occurred in Hans Vestberg’s own business unit, and continued whilst he was CFO and then CEO. The Djibouti bribes were made during his tenure as CEO, as were the unexplained receipts from the Russian Laundromat. He was removed from office by his board and there was later the embarrassment of Ericsson paying a billion-dollar settlement to the DoJ as a result of its corrupt business practices. You might think these were career-limiting issues, but apparently not. Following his 2016 departure from Ericsson, Vestberg was appointed Chief Technology Officer at Verizon before becoming their CEO in August 2018, and Chairman of Verizon’s Board of Directors in March 2019.

The icing on the cake came in May 2021 when BlackRock Inc elected Hans Vestberg to its board. Not only that, but he has a governance role as a member of the Audit Committee! Maybe I’ve missed the point here, but it appears that he failed to recognise and deal with fraud, bribery and corruption over many years in Ericsson, so how does that qualify him for a crucial governance position in the world’s largest asset manager?

Chickens Coming Home to Roost?

It seems the patience of Ericsson’s shareholders has finally snapped in the wake of analysts describing the company as “uninvestable”. In some respects, the only factor keeping Ericsson alive is the political pressure not to purchase from Chinese rivals Huawei. Reuters has reported that Ericsson, and its CEO and CFO have all been named as defendants in a US class action lawsuit for misleading investors about the company’s dealings in Iraq. The filing said that, amongst other things, Ericsson had misled investors by overstating the extent to which it had eliminated the use of bribes. Ericsson said in a brief statement that the company and “certain (company) officers” had been named as defendants in connection with “allegedly false and misleading statements” concerning Iraq.

Regardless of the outcome, it must be a good thing that Ericsson board members are finally being held personally accountable for their actions, or for their inaction. The billion-dollar question is whether previous board members will ever pay a price?

Sweden’s Heroes and Villains

We know of all these failings of corporate governance in Sweden because of the investigations performed by the Swedish media. They have been unearthing and reporting these allegations consistently since 2000. If the CEO is ultimately accountable for his company, then by the same logic, governments must be accountable for their countries. The Swedish press has been blowing the whistle on corporate corruption for 20 years, but we haven’t seen those disclosures matched by appropriate prosecutions and convictions. Sweden’s politicians and their lack of ‘tone from the top’ means that Sweden is, quite rightly, rising up the global corruption index.

I will be looking out for the reports and the results of the Djibouti trial. Let us hope it provides a green shoot of accountability, and the first of many small steps towards putting Sweden’s reputation back where it belongs.

David Morrow
David Morrow
Dave has 35 years of law enforcement, investigation and fraud management experience including multiple international assignments. He is a recognised telecoms fraud expert and for a number of years chaired the GSMA workgroup responsible for Security & Fraud Risk Assessments.

Dave now provides fraud management support as an independent consultant.