Hewlett-Packard Company (NYSE:HPQ) Claims Italian Resellers Unknowingly Shipped To Syria

In a letter to the Securities and Exchange Commission today Hewlett-Packard Company (NYSE: HPQ) denied the allegations of supplying equipment to Syria against  its corporate policy. The equipment is worth more than $500,000  according to a Bloomberg report issued earlier this November.

News of Hewlett-Packard Company (NYSE: HPQ) equipment placed in an under construction surveillance facility being built to monitor email and internet usage of Syrian citizens, surfaced last year. The SEC initiated an inquiry into the matter through an official letter demanding company management to comment on the news reports dated September 6.

Today’s letter is in furtherance of the preliminary response letter dated 9th October in which the company claimed it had no knowledge it’s equipment was being sold to Syria and that “It is always possible products may be diverted to Iran or Syria after being sold to Channel partners , such as distributors and reseller”.

According to the Wall Street Journal the equipment was bought from Italy based Area SpA- contractor of the project, who had been sourcing equipment from Hewlett-Packard Company (NYSE: HPQ) till 2009.

The said letter also brought to the attention of the litigator the fact that Area ‘s contract with HP specifically prohibited sales to embargoed or sanctioned countries.  Hewlett-Packard Company (NYSE: HPQ) had ended the official contract with AreaSpA in 2009 when it pulled the plug on all resellers who shipped to Iran, Sudan and Syria. The current purchase was sourced through one of the offshore reseller of the PC manufacturer, in Italy.

Earlier this November AreaSpA also clarified its stance saying it had complied with all export rules and also denied having any dealings with Syrian Intelligence Agencies.

The shares of Hewlett-Packard Company(NYSE:HPQ) fell by 2.98% to close at $12.36.

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Published by Viraj Shah

Viraj Shah has done M.Com (Finance) and currently pursuing CFP. He is a technical analyst who tracks US markets along with other global markets like India very closely. He is very passionate about stocks and believes that money can always be made in market.

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