ZTE in Mongolia corruption probe

Management of the Chinese telecoms gear maker is being investigated following the arrest of a Mongolian tax official who handled ZTE's tax affairs.
Written by Ryan Huang, Contributor

ZTE is under investigation for corruption in Mongolia, following the arrest of a Mongolian tax official who handled the company's tax affairs.


E. Amarat, the lead investigation officer of Mongolia's Anti-Corruption Agency, confirmed the earlier speculation of a bribery probe in March during a press conference, in a report last Friday by the Financial Times.

Senior managers of the Chinese firm had reportedly been detained for alleged bribery involving a digital education project, according to The Standard. Following tip offs, Mongolian anti-corruption officers had raided ZTE offices and its managers' homes, the article added.

The Standard noted from 2007 to 2012, the telecoms gear marker has been linked to bribery in the Philippines, Algeria and Norway.
In March, ZTE posted its second straight quarterly loss for it fourth quarter to round off its first yearly loss ever at US$456 million. It blamed a delay in overseas projects and low-margin contracts.

That same month, the firm revealed it had reduced some middle and senior management positions amid an ongoing organizational review which begun last year to streamline the organization.

ZTE, along with Chinese counterpart Huawei, have been under scrutiny by the United States government for being a national security threat due to their alleged links to the military. It had also been under investigation by the FBI for allegedly selling surveillance equipment against trade sanctions to Iran.

ZTE did not reply to queries at time of publishing.


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