BOARD REVAMP FOR ZTE
Wants US ban lifted
Chinese telecom giant ZTE is moving quickly to get itself back into Uncle Sam’s good graces.
The Asian smartphone maker unveiled on Friday a shake-up of its board — one of three key moves the company had to make to get out from under a suffocating ban on buying US technology.
ZTE has already taken care of the other two demands from Washington — paying a $1 billion fine and placing $400 million in an escrow account.
ZTE in April was banned from purchasing parts from any US supplier for seven years after it was found to have violated an agreement not to sell equipment to North Korea or Iran.
The decision amounted to a death sentence for ZTE, which relies on US parts and which announced that it was halting operations. The ban also hurts American companies that supply ZTE.
It also resulted in an embarrassing situation whereby ZTE was unable to repair an American-made urinal at one of its offices for fear of violating the ban.
The company was saved when President Trump, feeling heat from Beijing, ordered his Commerce De- partment to find a way to allow ZTE stay in business.
That request resulted in the three-pronged agreement.
In the board shake-up, Li Zixue was elected chairman, ZTE said in regulatory filings on Friday.
The old board and senior management, headed by Chairman Yin Yimin, tendered their resignations on June 29, it added.
Commerce has still not worked out the details necessary for lifting the ban — but Commerce Secretary Wilbur Ross is confident the agreement will be effective in keeping ZTE in line.
“Removal of the directors and executives will have a deterrent effect on other individuals at ZTE and elsewhere, by showing that violative behavior has consequences for the individuals involved,” Ross said in a statement.
The deal faces strong opposition from some lawmakers.
The uncertainty over the ban amid intensifying USChina trade tensions has hammered ZTE shares, which have cratered 60 percent since trading resumed earlier this month following a two-month hiatus — wiping out more than $11 billion of the company’s market valuation.