China's ZTE Corp says main business operations cease due to US ban

TechnologyReuters

Visitors pass in front of the Chinese telecoms equipment group ZTE Corp booth at the Mobile World Congress in Barcelona, Spain, February 26, 2018. REUTERS/Sergio Perez (Reuters)

HONG KONG (Reuters) - ZTE Corp's main business operations have ceased due to a ban imposed by the U.S. government, but the Chinese firm is trying to have the ban modified or reversed, it said in exchange filings late on Wednesday.

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ZTE, China's second biggest telecom equipment maker, was hit last month with a ban from Washington forbidding U.S. firms to supply it with components and technology after it was found to have violated U.S. export restrictions.

"As a result of the Denial Order, the major operating activities of the company have ceased," ZTE said in the filing.

"As of now, the company maintains sufficient cash and strictly adheres to its commercial obligations subject to compliance with laws and regulations," it said.

ZTE said it was actively communicating with the U.S. government "in order to facilitate the modification or reversal of the Denial Order by the U.S. government and forge a positive outcome in the development of matters."

The ban that threatens to cut off ZTE's supply chain came amid heightened tension over a possible U.S.-China trade war. The Chinese government raised the issue of ZTE last week with a visiting U.S. trade delegation.

ZTE said on Sunday it had submitted a request to the U.S. Commerce Department for the suspension of the ban.

ZTE appears to have suspended its online stores on its own website as well as on Alibaba Group's e-commerce platform Taobao over the past few days, which display a "page being updated" message with no products to order.

The Chinese firm did not respond to calls and messages from Reuters seeking comment.

ZTE settled the sanction case with the U.S. government last March after admitting to illegally shipping products with U.S. technology to countries including Iran and paying a record fine of nearly $900 million.

Last month, the U.S. government reactivated the ban after it said ZTE violated terms of the settlement and made repeated false statements, which ZTE disputed.

(Reporting by Sijia Jiang; Editing by Jason Neely and Edmund Blair)

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