Chinese telecommunication giant ZTE is under investigation for violating the US trade rules. The findings of the investigation could lead to different charges from the United States.
The company said it cannot assess yet its potential liabilities or the actual impact on their financial status. The company which is well known for selling smartphones and other networking equipment have been in its rebuilding stage after the issue of the company's violation to the rules regarding the export of American technological goods to Iran, as per The Wall Street Journal.
ZTE, on the other hand, announced that it replaced three of its senior executives. According to the Financial Times, the company's new chairman and executive, Zhao Xianming addressed his employees, saying the company needs introspection and high importance in complying with the law and regulations.
The sanctions that were given by the US blocked the company's ability to get US components and software which is the basis for its operations. The US government, however, has agreed to suspend the sanction in lieu of the company's cooperation with the investigation.
The 2015 financial reports of ZTE was delayed due to the sanctions that the US have imposed. The company had adjusted the revenue for the year 2015 to be ready for any potential damage it will incur on its contracts once the sanctions are given.
As stated by Bloomberg, the company reported its 2015 profit which are far lower than its estimated amount. The net income for the year 2015 was $3.31 billion which lags from its previous forecast of $3.78 billion.
ZTE's tradings in the stock market which are listed in Shenzhen and Hong Kong were also suspended since March 7 following the sanction. The company's previous CEO, Shi Lirong, and two other executives, Tian Wengou and Qui Weizhao, have been replaced following the company's agreement with the US to remove the people that were involved in the issue from the managerial positions.
