Ericsson CEO Börje Ekholm leaves Alibaba board to focus on his main job
Chinese giant expands share buyback program, Big E still working through corruption issues
Alibaba has announced that Ericsson CEO Börje Ekholm will retire from its board on March 31, 2022, after almost seven years as an independent director.
"Alibaba is an incredible company and I continue to believe in its future," Ekholm said in a canned statement, crediting his retirement from the board as part of an effort "to devote more time to Ericsson's business."
It's not hard to see why Ekholm wants to focus on his day job. Top of the list, he must deal with the revelation that Ericsson employees may have indirectly paid off ISIS to get equipment shipped through terrorist roadblocks.
Ekholm has already said that an investigation into the matter "identified evidence of corruption-related misconduct."
That admission caused a 12 percent drop in the share price.
Ericsson also needs to address a significant drop in revenue from China, where things went sour after Sweden – Ericsson's home nation – banned China's telco titan Huawei. In the past, Ekholm has also expressed fear of retribution in Asia following sanctions imposed by Sweden's government – even if European bans on Huawei have benefitted Ericsson.
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Ericsson is also digesting its $6.2 billion acquisition of Vonage – a deal struck as part of a "strategy to expand its presence in wireless enterprise and broaden its global offerings."
The Swedish firm has signaled more mergers and acquisitions are likely in pursuit of that goal.
And if all this weren't enough on Ekholm's plate, Ericsson has also been the subject of scrutiny by the United States Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) regarding allegations of bribery in other nations.
Ericsson last week hired a new chief legal officer to help it with what the company has described as an ongoing "monitorship and deferred prosecution agreement" with US authorities. Ahead of the company's AGM, to be held today, the company's board has assured investors it is on top of these matters.
The 5G kit-slinger is also prepping for a lawsuit with Apple over 5G patent infringements.
Ekholm's replacement on the Alibaba board is Weijian Shan – a Beijing-born and USA-educated chap who currently serves as CEO of investment firm PAG, and has been known to comment on Sino-American relations and other regional matters.
Alibaba CEO Daniel Zhang described Weijian as "a trusted leader in the global financial industry who has been an active facilitator for greater understanding between Asia and the rest of the world."
"I believe Alibaba will benefit greatly from his deep knowledge across different industries and global perspective," said Zhang.
Alibaba announced it has increased its share buyback program from $15 billion to $25 billion.
Deputy CFO Toby Xu told multiple sources that the upsized program reflects Alibaba's belief that its current share price does not properly reflect its financial health and long term upside.
Share prices for Alibaba have slid since late last year, following a regulatory crackdown from Beijing that forced the company to reorganize its affairs.
While Beijing has recently and intensely put pressure on Big Tech to comply in all manner of ways, there has been some evidence a reprieve is nigh. Last week, Chinese vice premier Liu He said measures are coming to boost the Chinese economy, and asked regulators to be more consistent and transparent.
His comments came at around the same time that Chinese president Xi Jinping and China's Cyberspace Administration declared a new era of digitization was beginning in the Middle Kingdom. ®