STOCKHOLM (Reuters) – Activist investor Cevian Capital, one of Ericsson’s largest shareholders, said on Monday it will vote against granting discharge to the company’s board members, as well as its president, at the annual general meeting (AGM) on Tuesday.
Ericsson has been under fire from the U.S. Justice Department and its shareholders for not properly disclosing that its investigation in 2019 had showed the company may have paid militant organizations in Iraq.
“We still lack the information necessary to make an informed judgment of what went wrong, why, and who should be held responsible,” Cevian said in a statement. “Given the lack of information and the magnitude of the damage, we have no choice but to hold the entire board accountable.”
Under Swedish Companies Act, the company or shareholders can bring action against board members or the CEO if a group representing at least 10% shares of the company votes against ratifying acts of the CEO in the past year.
Cevian owns just under 5% shares in Ericsson.
If a board member or the CEO is granted discharge from liability at the AGM, the company or its shareholders may not be able claim damages related to the person’s management of the company during the financial year.
(Reporting by Supantha Mukherjee in Stockholm; editing by Niklas Pollard)
