Nokia plays down compliance issues after shares drop
(Adds fresh Nokia comment, background, updates shares)
By Tarmo Virki
HELSINKI, March 22 (Reuters) - Nokia sought to
play down the risks of an investigation into compliance issues
at its Alcatel-Lucent business after its shares fell sharply on
The Finnish network equipment maker flagged the issue in its
annual report which was released late on Thursday to the U.S.
Securities and Exchange Commission. Nokia said it had launched
an investigation into certain transactions of the business it
bought in 2016.
After the shares dropped more than 8 percent in Europe on
Friday, Nokia issued a statement saying it did not think the
issues would have any material impact on the group.
"We believe it is highly likely that any penalties that
might apply would be limited and immaterial," Nokia said.
The shares pared some of the earlier losses to be down 5.4
percent at 1545 GMT.
In its annual report Nokia said certain practices at the
former Alcatel-Lucent business had raised its concerns during
the integration process and it had informed relevant regulatory
authorities, without elaborating.
Nokia told Reuters on Friday it was scrutinising certain
transactions and its investigation was at a relatively early
The telecoms sector has seen a number of relatively large
deals in recent years: Nokia itself bought Siemens out from
their mobile networks' joint venture in 2013, and Alcatel-Lucent
was a result of a 2006 merger.
However, integrating acquisition targets has been cumbersome
-- those deals have been plagued by difficulties including
trying to cut costs in an R&D intensive business, rivals
stealing contracts, and struggles over power.
(Additional reporting by Anne Kauranen, editing by Louise
Heavens and Elaine Hardcastle)
First Published: 2019-03-22 13:17:35
Updated 2019-03-22 18:12:22
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