A
new chairman has been appointed for ZTE as part of an expected
board overhaul, as the Chinese vendor looks to put a recent US import
ban – which crippled its business – behind it.
The
company I in a statement confirmed that it appointed eight new board
members, including Li Zixue as its chairman, after making nominations
in mid-June.
The
former board, which consisted of 14 members, resigned, making way for
the downsized board. The move complies with terms set by the US
following a settlement with ZTE to lift a seven year ban on US
companies selling equipment to the vendor.
Following
the ban, implemented in April, ZTE was forced to suspend its
operations. Along with committing to changes to its management and
compliance procedures, ZTE also agreed to pay a fine of $1 billion
and place an additional $400 million in escrow.
The
new board consists of five non-independent directors: Li Zixue; Li
Buqing; Gu Junying; Zhu Weimin and Fang Rong. Three independent
directors have also been appointed: Cai Manli, Yuming Bao and Gordon
Ng. Bloomberg pointed
out Li Zixue is the deputy director of Xi’an Microelectronics
Technology Institute, a research unit of the China Aerospace Science
and Technology Corporation and a key technology provider to the
nation’s space and defence programmes. It was also an early
investor in ZTE.
As
part of the revamp, ZTE also confirmed it was applying for financing
of around $10.5 billion to rebuild its business, which had also been
widely reported .
ZTE
is seeking $6 billion in credit from the Shenzhen branch of the China
Development Bank and an additional CNY30 billion ($4.5 billion) from
the Bank of China.
The
new leadership will be tasked wth rebuilding ZTE following the US
fracas, as well as ensuring the company remains compliant with terms
set by the country. ZTE lost at least $3 billion after
suspending its operations, Bloomberg reported,
and around $11 billion in market value since resuming trading on
June 13.
Although
ZTE is taking steps to comply with US terms, there is still a threat
the settlement could yet be derailed. The US Senate last month
approved an amendment to a defence spending bill which could overturn
the Department of Commerce’s agreement to lift trade sanctions
against ZTE.
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