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FBI Investigates ZTE

5:20 AM -- This doesn't look good for ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763).

The Federal Bureau of Investigation (FBI) has reportedly opened a criminal investigation into the Chinese vendor regarding alleged shipments of U.S. technology to Iran in contravention of federal laws and a trade embargo, according to The Smoking Gun.

According to the website, ZTE supplied Telecommunication Company of Iran (TCI) with a package of technologies that included products from Microsoft, Oracle, Cisco Systems, Dell, and Symantec.

ZTE responded to criticism of its engagement with TCI earlier this year by stating, amongst other things, that it "always respects and complies with international and local laws wherever it operates." (See ZTE Defends Iran Position.)

Light Reading Asia/Pacific Contributing Editor Robert Clark contacted ZTE's headquarters in Shenzhen about the FBI investigation, but the company said it had not heard anything from the U.S. authorities and declined to comment further.

News of the FBI probe has not frightened investors away from ZTE's stock, it seems: Its share price is up nearly 1.5 percent to HK$12.50 in Friday trading on the Hong Kong exchange.

This isn't the only pressure ZTE is facing in the U.S. as the vendor has been named in patent infringement allegations and is under scrutiny by the House of Representatives' Intelligence Committee. (See More Bother for Huawei, ZTE and More Chinese Whispers.)

— Ray Le Maistre, International Managing Editor, Light Reading

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