ZTE Ends Share Trading Following Crackdown by U.S.
ZTE suspended trading on the Shenzhen and Hong Kong indexes of its shares after it has emerged that the United States would place restrictions for exports on the telecoms equipment company based in China.
These restrictions, which were reported first by an international news agency, would force ZTE to file an application for a special type of license prior to them being able to sell the products made in the U.S. to ZTE.
This follows an investigation by the Department of Commerce into the control of export and import violations stemming from sales to TCI a telecom based in Iran.
ZTE did not give an explanation for the suspension of shares on Monday in the stock exchange in China. In a prepared statement, the company claimed it was maintaining uninterrupted communications with the government departments from the U.S. over the concerns.
The company said it would continue its normal operations during which time it conducts a comprehensive assessment and would be actively communicating with its shareholders.
The company in a prepared statement said that as a business that is responsible, ZTE is striving to ensure all its activities operationally adhere to practices in international trade and activities that are under the laws and regulations of different host countries.
The company at present sells between 8% and 10% of the telecoms equipment in the world, said one research firm, that also said the ZTE components from U.S. vendors were between 10% and 15%.
Those suppliers include Altera and Qualcomm.
According to one company, ZTE already has procured the parts for the U.S. it needs during 2016.
It could also face longer supply chain issues than first thought. At the same time, the government of China expressed its anger over the reports released.
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