  Chinese telecoms gearmaker ZTE Corp which bagged massive contract from BSNL of supplying equipment for 10.15 million GSM line is in trouble in the US.
According to a Reuters report, the company could face steep fines and restrictions on its US operations if it is found to have illegally sold US computer products to Iran.
The FBI has opened a criminal investigation into ZTE Corp over the Chinese company's sale of banned U.S. computer equipment to Iran and its alleged subsequent attempts to cover it up and obstruct a Department o Commerce probe.
According to the website “Officials with ZTE allegedly began plotting to cover up details of the Iranian deal after Reuters reported on the transaction in late-March. The news agency revealed that the telecom equipment sold to Iran was a “powerful surveillance system capable of monitoring landline, mobile, and Internet communications.” Included in the material sent to Iran were products manufactured by U.S. firms like Microsoft, Oracle, Cisco Systems, Dell, and Symantec.”
The law authorizing US sanctions against Iran allows for a civil penalty up to twice the value of a transaction, which in ZTE's case would translate to $240 million or more.
Individuals, such as company employees, convicted under the law can be sentenced to 20 years in prison, and companies in the most extreme cases can be cut off entirely from commerce with the United States, Reuters quoting legal experts said on Friday.
ZTE's China-based spokesman David Shu said in response to Reuters’ questions about the investigations: "We've been actively engaging relevant U.S. government departments and we're cooperating with them on various matters."
He said that the company's US subsidiary's main business is to deliver mobile devices to the US market. He denied it is involved in products for any other market, such as Iran, and said the company is confident in the US subsidiary's prospects.
For ZTE, the BSNL contract in India will bring in valuable business at a time when gear makers are facing scarcity of business and losses because new mobile phone companies are canceling contracts since their operating licences are no longer valid. |