ZTE Shares Down On Reports Of Possible $1 Bln Fine To US Govt
(RTTNews) - ZTE Corp. (ZTCOY, ZTCOF, 0763.HK, 000063.SZ]), a Chinese telecom equipment maker, via Hong Kong exchange, stated that it is in ongoing communication with the United States Department of Justice regarding the investigation of ZTE's compliance with the Foreign Corrupt Practices Act or FCPA of the United States.
Reuters, citing two people familiar with the matter, reported that ZTE Corp may pay more than $1 billion to the U.S. government to resolve years-old allegations of foreign bribery.
Following this, ZTE's shares were trading down 12.33% to HK$27.74 on the Hong Kong Stock Exchange.
The FCPA prohibits U.S. companies and individuals, as well as foreign companies with U.S. ties, from bribing foreign government officials to gain a business advantage. It also requires companies to maintain accurate financial records and internal controls to prevent corruption.
The current allegations and investigations by the U.S. Department of Justice against ZTE centre on foreign bribery in various countries to secure telecom deals, particularly in South America.
However, following the current allegation and ongoing communication, ZTE reported that production and operations remain normal and that it maintains a zero-tolerance policy toward any individuals involved in such activities.
