More bad news for ZTE Corp, on the same day the company was found to pose “significant security concerns” to the US, longstanding partner Cisco has ended its relationship with the Chinese telco giant over allegations that ZTE sold Cisco equipment to Iran.
Cisco’s probe followed stories by Reuters in March and April that documented how Shenzhen, China-based ZTE had sold banned computer equipment from Cisco and other U.S. companies to Iran’s largest telecom firm. ZTE also agreed last year to ship millions of dollars worth of additional U.S. tech products, including Cisco switches, to a unit of the consortium that controls the telecom firm.
ZTE has continued to do business in Iran where American-made tech products long have been subject to U.S. sanctions. A parts list dated July 2011 for an equipment contract between ZTE and Telecommunication Co of Iran (TCI) included several Cisco switches. ZTE later agreed to sell five Cisco switches to a unit of the consortium that controls TCI, according to documents reviewed by Reuters.
The FBI is also investigating ZTE over allegations that the company attempted to cover up links to Iran, including possibly shredding documents, after the original Reuters story broke.