U.S. probes China’s ZTE Corp in probation violation case

Chinese smart phone manufacturer and telecommunications provider, ZTE Corporation (SHE: 000063, HKG: 0763), has been ordered to participate in a probation violation hearing by the United States Department of Justice.

The hearing, scheduled for March 14, relates to former ZTE employee Jianjun Yu, who is accused of being involved in conspiracy to commit visa fraud.

It’s alleged Yu was involved in a scheme that saw Chinese nationals brought to the U.S. under J-1 visas, which are designed for work and study at educational or other non-profit research institutions. However, prosecutors believe after arriving, the Chinese nationals worked at a ZTE research and development facility in New Jersey.

The case also involves Gee-Kung Chang, a professor at the Georgia Institute of Technology. Gee-Kung Chang has pleaded not guilty.

“The visa case involves charges against Jianjun Yu, who has already left from the Group years ago. As of the date of this announcement, no corporate member of the Group has been charged in the visa case,” said ZTE in a statement.

“The Company will actively take all practicable next steps under the legal framework to properly handle the relevant matters.

“At present, the Company’s production and operation activities are carried out normally.”

Over the past 12 months, ZTE Corporation’s Hong Kong-listed stock has fallen around 10%. However, the company told the Honk Kong Exchange last month it expects 2021 profit to be at least US$1.02 billion. That would be an increase of 52.6% percent on 2020.

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