ZTE Faces $1 Billion Settlement Over Global Bribery Allegations

ZTE Corp is under investigation by the U.S. Justice Department for alleged foreign bribery, potentially resulting in over $1 billion in penalties. The company's Hong Kong and Shenzhen shares have dropped significantly. A hefty settlement may impact ZTE’s finances amid ongoing U.S.-China trade tensions.

Chinese telecom giant ZTE Corp may face penalties exceeding $1 billion to resolve allegations of foreign bribery, involving substantial payments or benefits to foreign officials aimed at securing lucrative contracts, according to insider sources.

The U.S. Justice Department's continuing investigation focuses on ZTE's operations in South America under possible violations of the Foreign Corrupt Practices Act (FCPA). These allegations come alongside previous penalties paid by ZTE for export violations in Iran during Donald Trump's presidential term.

Any settlement could severely impact ZTE's financial health, as the U.S. government considers lifting its previously imposed export bans, which could jeopardize key partnerships, including with suppliers like Qualcomm. The case highlights long-standing scrutiny over telecommunication firms engaging in corrupt practices worldwide.

(With inputs from agencies.)