April 26, 2018 / 7:13 AM / 25 days ago

Chinasoft says share dive related to U.S. probe of key client Huawei

HONG KONG (Reuters) - Chinasoft International attributed the biggest one-day drop in 10 years in its shares on Thursday to “the investigation of Huawei Technologies Co Ltd by the US Department of Justice” and said there was no immediate impact on its business.

Beijing-headquartered Chinasoft, an information technology-related service provider, said in a statement Huawei, the world’s largest maker of telecommunications network equipment and the No. 3 smartphone supplier, is a key client.

U.S. prosecutors in New York have been investigating whether Huawei violated U.S. sanctions in relation to Iran, according to sources familiar with the situation. Huawei said it complies with “all applicable laws and regulations where it operates, including the applicable export control and sanction laws and regulations of the UN, US and EU.”

Shares of Chinasoft, plunged as much as 21 percent on Thursday, the biggest daily percentage fall since October 2008, before recovering slightly to be down 17 percent in afternoon trade.

“After careful assessment by the company’s management, it has no significant impact on the business of the company for the time being,” Chinasoft chairman Chen Yuhong said in a filing to the Hong Kong bourse at midday on Thursday. The statement gave no further details.

Reporting by Donny Kwok; Editing by Muralikumar Anantharaman

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