The US defense manufacturer RTX (formerly Raytheon) terminated a multi-billion-dollar agreement with Saudi firm Scopa Defense earlier this week, the Wall Street Journal reported on Thursday, citing sources.

This decision was reportedly made due to apprehensions that Scopa Defense was engaged in transactions with Chinese, Russian, and Belarussian entities subject to sanctions. 

Two companies linked to Scopa Defense, namely Tal Military Industries and Sepha Military Industries, conducted business with sanctioned entities from China, Russia, and Belarus.

This led to the resignation of retired US military personnel serving on Scopa's board, as outlined in the report.

Furthermore, Scopa Defense removed its Chief Executive Officer, Nasr Alghrairi, a US Navy veteran, after he expressed concerns to the company's Saudi owner, Mohamed Alajlan.

Read more: Saudi Defense firm Scopa drops US alliance, diverts to Russia, China

Scopa Defense, established in 2021, represents one of the most prominent companies in Saudi Arabia aimed at transitioning the nation from importing arms to developing its domestic military sector.

According to the report, Alajlan refuted allegations of engaging with companies under international sanctions and having dealings with Russian firms.

Last year, RTX and Scopa Defense entered into a memorandum of understanding with the intention of establishing a factory in Saudi Arabia.

Their objective was to manufacture air defense systems designed to counter drone and missile threats.

The US government has expressed apprehension regarding the possibility of its weapon systems being compromised if the technologies integrated into Scopa Defense's weaponry were acquired by Chinese or Russian entities and subjected to reverse engineering.

Read more: China entirely cuts off Lockheed Martin, Raytheon from domestic market