ZTE halted from trade after report of US export curbs
ZTE Corp. shares were halted from trade on the Hong Kong stock exchange Monday after Reuters reported that the U.S. was close to slapping export restrictions on China's second-largest vendor of networking and telecommunications gear.
The Department of Commerce intends to impose curbs on ZTE starting Tuesday for allegedly violating sanctions on Iran, Reuters said, citing documents it obtained as well as an unidentified senior official. Suppliers to the company will then have to apply for licenses that will generally be denied, Reuters reported, making it difficult for the Chinese company to buy Americanmade equipment and parts.
"ZTE has been working with relevant U.S. government departments on investigations, maintaining constant communication with relevant departments and is committed to fully address and resolve any concerns," Lunitta Lu, a spokeswoman for the company, said in an e-mailed statement. "ZTE strives to ensure all operational activities adhere to international trade practices and the laws and regulations of host countries." The stock closed 3.5 percent higher at HK$14.16 on Friday, and are down almost 20 percent since the start of 2016 in a weak Hong Kong market. No reason was given in the trading halt Monday morning.
ZTE, one of the world's largest networking gear vendors and a maker of smartphones, has encountered issues with the U.S. government in the past, including blacklisting over accusations of aiding espionage. The company denied the allegations.