Tech and Science News
China's ZTE Corp names c-suite executives in step toward U.S. ban lift
HONG KONG (Reuters) - ZTE Corp (0763.HK)(000063.SZ) 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 U.S. firms supplying parts to China’s second-biggest telecommunications equipment maker.
ZTE, in an exchange filing on Thursday, named a former head of its Germany business, Xu Ziyang, as its new chief executive.
Wang Xiyu, Gu Junying, Li Ying, have been named executive vice presidents, the filing showed. Li Ying is also appointed as chief financial officer.
ZTE had promised to overhaul its management within 30 days of agreeing a $1.4 billion settlement with U.S. authorities in June, aimed at lifting a seven-year supplier ban. It received a reprieve from the ban earlier this week to continue existing business from July 2 to Aug. 1.
ZTE, which relies on U.S. suppliers for core components, had to cease major operations in April after authorities imposed the ban, saying the firm broke an agreement to discipline executives who conspired to evade U.S. sanctions on Iran and North Korea.
As part of the settlement, ZTE agreed to pay a $1 billion fine, put $400 million in escrow, and hire a U.S.-appointed compliance monitor. It also agreed to replace its board, remove all members of its leadership at or above senior vice president level along with any executives associated with the wrongdoing, and punish responsible executives.
Zhao Xianming is no longer company’s CEO, ZTE said in the filing. Five executives including Xu Huijun, Zhang Zhenhui, Pang Shengqing, Xiong Hui and Shao Weilin have been removed from executive vice presidents posts.
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.
New CEO Xu was most recently president of ZTE’s telco cloud and core networks product line, according to past media reports. New Chief Technology Officer Wang Xiyu was formerly a deputy CTO, and new Chief Financial Officer Li Ying was only promoted to vice president earlier this year, according to company insiders.
Some employees Reuters spoke to have expressed concern about whether a new board and management could settle in smoothly to successfully revive the firm without the help of veterans. Analysts have also said it would take time for ZTE to rebuild market confidence even after the ban is lifted.
Reporting by Sijia Jiang, Twinnie Siu and Meg Shen; editing by David Evans