USA authorities temporarily lift ZTE ban

  • USA authorities temporarily lift ZTE ban

USA authorities temporarily lift ZTE ban

ZTE Corp. has appointed a 20-year veteran to lead the Chinese telecoms firm as the USA weighs an end to a seven-year ban.

About one-third of the components ZTE uses are US-made, and the company is on the verge of shutting down, after paying fines but declining to remove its head officials.

China's embattled ZTE Corp (000063.SZ) has named a set of new top executives, including CEO and CFO, to comply with its deal with the United States to get a supplier ban lifted, the Wall Street Journal reported on Thursday. It was forced to shut down operations and has been largely inactive since then. ZTE shares in Hong Kong rose about 2% and Ericsson gained as much as 1.1% in early trading in Stockholm.

The Chinese smartphone and telecoms network equipment manufacturer is required to change its management team, dismiss any employee at a senior vice president level or above and pay the U.S. government a $1 billion fine for the ban to be overturned, with a further $400 million held in escrow.

ZTE appointed 20-year veteran Xu Ziyang as CEO, replacing Zhao Xianming.

An insider source told Reuters a memo was sent out on July 3 announcing the removal of seven other executives, without providing a reason. They are the latest additions of Team Disgrace and join three vice presidents and heads of legal, finance and supply chain departments.

The new management appointments come after ZTE last week elected a new board led by 54-year-old Li Zixue as chairman to replace a 14-person board led by Yin Yimin, Reuters noted. The company told the outlet that it will be in compliance with US demands by the end of this period.

The Commerce Department's new ZTE authorization is meant to only give China's second largest smartphone manufacturer the ability to provide support for current customers as well as make and receive payments involving current company contracts.