BEIJING — ZTE Corp., China's second-largest telecoms equipment maker, has essentially stopped doing business in Iran after a US investigation into alleged sales of embargoed equipment, the company's chairman told Reuters on Thursday. ZTE said in March 2012 that it would curtail business in Iran following a report by Reuters that it sold Iran's largest telecoms firm a powerful surveillance system capable of monitoring telephone and Internet communications. The company is now facing a US criminal investigation over its alleged cover-up of the sale. “We've basically stopped. We have to continue to service the products we had sold before — we have no choice,” Hou Weigui said in an interview in Beijing. “We maintain communication with them to enable locals to carry out maintenance.” Hou's disclosure is the first public acknowledgement of how deeply the scrutiny has affected the company. While he declined to give details on the amount of business ZTE had done in Iran before, Hou said the compensation it had to pay clients there for breaking contracts, and the fact that it had to halt some shipments even after equipment had been manufactured, were important reasons for the company's first-ever annual loss in 2012, of 2.84 billion yuan ($460.1 million). Losses in Europe were also a big factor in the poor performance in 2012, he said. “I think we've really been treated unjustly on this issue. Others are selling the same things, and we weren't even selling the most,” Hou said. “Now we face these restrictions, and others in the industry aren't facing any restrictions — they're all still selling. This is a bit unfair.” Hou said local rival Huawei Technologies Co. Ltd. was still doing business in Iran, but he declined to elaborate. — Reuters
