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ZTE replaces entire executive team to comply with technology ban deal

09 July 2018

It's not clear whether a permanent order will follow, but ZTE is expected to be in full compliance with USA demands by August 1, Bloomberg reports.

ZTE has been fighting for its survival since April, when it was banned from sourcing vital US components by the US Dept. of Commerce in after the Chinese vendor was found to have breached penalties imposed for sanctions violations.

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The Journal reported that the swift change indicates ZTE is hurrying to meet requirements laid out by the U.S. Commerce Department as part of a deal to allow the Chinese phone-maker to do business in the United States again. According to the report, the giant also appointed a new CTO as well as a new head of human resources, after a Reuters source claimed on Tuesday that seven senior executives were removed in total, according to an internal memo.

ZTE has named its new CEO and re-shuffled senior management as it tries to get the U.S. to remove the seven-year ban placed on the Chinese manufacturer.

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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. 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.

Company insiders told Reuters almost two dozen senior executives left ZTE on Friday. ZTE has made the $1 billion payment but has yet to deposit the $400 million in escrow, according to sources. -China trade tensions has hammered ZTE shares, which have cratered around 60 percent since trading resumed last month following a two-month hiatus, wiping out more than $11 billion of the company's market valuation.

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ZTE replaces entire executive team to comply with technology ban deal