Published: Mon, July 09, 2018
Markets | By Otis Pena

ZTE names new CEO, other top executives to comply with US mandate

ZTE names new CEO, other top executives to comply with US mandate

In April, ZTE was banned from importing phone parts from the USA for repeatedly misleading the Commerce Department's Bureau of Industry and Security.

ZTE, the Chinese smartphone maker that was banned from operating in the US this past April, may already be resuming its stateside operations.

ZTE Corp has appointed a new team of top executives including a CEO to comply with a deal it made with the United States to end a ban on US firms supplying parts to China's second-biggest telecommunications equipment maker.

It allows China's second largest telecoms firm to continue operating existing networks and equipment, in addition to providing handset customer support for contracts signed before April 15. They will also be allowed to transfer limited funds to or from ZTE.

Chinese tech company ZTE has tapped a new CEO as it scrambles to fulfill its end of the bargain with the USA government. Xu, a former managing director of ZTE in Germany, has been with the company since 1998.

As part of the agreement, the Commerce Department will impose a $1 billion penalty against ZTE, and a US -selected compliance team will be embedded in the firm for 10 years.

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Having gained more than 8% Wednesday, following news of the lifting of some trading restrictions by the US, ZTE's share price dipped almost 1.3% in Thursday trading on the Hong Kong Stock Exchange.

An insider source told Reuters a memo was sent out on July 3 announcing the removal of seven other executives, without providing a reason.

As part of the deal to lift the supplier ban, ZTE had agreed to remove all members of its leadership at or above the senior vice president level, along with any executives associated with the wrongdoing within 30 days.

In the letter, which was circulated online on Saturday, Zhang recounted his 18 years at ZTE and said he had no responsibility in ZTE's compliance violations. Last week, ZTE replaced its board of directors.

Despite the agreement reached nearly a month ago, the ban is yet to be lifted amid strong opposition among some USA lawmakers. Because of the ban, ZTE had ceased all USA operations in May.

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