Chinese
telecom equipment maker ZTE Corp warned on Tuesday that penalties it expects to
incur for allegedly breaking U.S. sanctions against Iran could impact its
results.
results.
In March,
the U.S. government hit ZTE with some of the toughest-ever U.S. export
restrictions for the alleged breaches. It has since issued temporary reprieves
on the curbs, which are now due to take effect some time after Feb. 27.
"The
company has been actively cooperating and communicating with relevant U.S.
government departments in order to reach a conclusion of the
investigation," ZTE said in a filing to the Shenzhen Stock Exchange.
"The
outcome of the settlement issues still remains uncertain but will likely have a
material impact on the financial conditions and operating results of the
company."
Measures it
has taken to placate Washington include a management overhaul and the
appointment of a new chief export compliance officer based in the United
States.
If no
settlement or reprieve extension were reached before the deadline, U.S.
suppliers would be banned from doing business with ZTE, which could cut off
much of the Chinese company's supply chain. ZTE relies on U.S. suppliers for
about one-third of its components.
*REUTERS*
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