Nokia shares dive on potential Alcatel-Lucent compliance issues
Finnish network equipment maker bought its former French rival in 2016
Nokia said certain practices relating to compliance issues at the former Alcatel-Lucent business had raised its concerns during the integration process
Shares in Finnish network equipment maker Nokia fell by over 8 per cent as the company said on Friday it was looking into transactions at its former French rival Alcatel-Lucent which it acquired in 2016, after reporting possible compliance issues at the unit to US authorities.
Shares were down 8.2 per cent in mid-morning trading, on track for a worst day since October 2017 and bottom of the pan-European STOXX 600 index.
“The last night comment on possible fines stemming from business transactions of Alcatel-Lucent is hurting the stock; the market is really sensitive about Nokia these days,” said Kimmo Stenvall, analyst at OP Markets.
Nokia said certain practices relating to compliance issues at the former Alcatel-Lucent business had raised its concerns during the integration process.
“To ensure complete compliance we are now scrutinising certain transactions in the former Alcatel-Lucent business, and although this investigation is in a relatively early stage, out of an abundance of caution and in the spirit of transparency Nokia has contacted the relevant regulatory authorities regarding this review,” Nokia said in an emailed statement.
Nokia said it had voluntarily reported the matter to the relevant regulators, and it was co-operating with the authorities to resolve the matter.
“The resolution of this matter could result in potential criminal or civil penalties, including the possibility of monetary fines, which could have a material adverse effect on our business, brand, reputation or financial position,” it said in a filing to the US Securities and Exchange Commission. – Reuters