TRADING in ZTE Corp.’s shares were halted yesterday after Reuters reported that the United States was close to slapping export restrictions on China’s second-largest vendor of networking and telecommunications gear.

    The U.S. Department of Commerce intends to impose curbs on ZTE starting today for allegedly violating sanctions on Iran, Reuters said Saturday, citing documents it obtained as well as an unidentified senior official of the Department of Commerce.

    Suppliers to the Shenzhen-based company will then have to apply for licenses that will generally be denied, Reuters reported, making it difficult for ZTE to buy American-made equipment and parts.

    “ZTE has been working with relevant U.S. government departments on investigations, maintaining constant communication with relevant departments and is committed to fully address and resolve any concerns,” Lunitta Lu, a spokeswoman for the company, said in a statement. “ZTE strives to ensure all operational activities adhere to international trade practices and the laws and regulations of host countries.”

    No reason was given in the trading halt yesterday.

    ZTE, one of the world’s largest networking gear vendors and a maker of smartphones, has encountered issues with the U.S. Government in the past, including blacklisting over accusations of aiding espionage. The company denied the allegations. It now buys components from American companies including Qualcomm Inc. and Broadcom Corp.

    “The restrictions, if implemented, will cause significant supply problems to ZTE given its major trading relationships,” Jefferies Hong Kong Ltd. analysts led by Cynthia Meng wrote yesterday, saying the stock will come under pressure as the market awaits clarification. Other suppliers included Microsoft Corp. and International Business Machines Corp., the analysts wrote.

    “ZTE can purchase chipsets outside of the United States for some low-end handset products, but that remains a small portion of total revenue.” (SD-Agencies)