China’s ZTE overhauls management team amid talks to lift US curbs
A revamp of its senior management could help ZTE, China’s largest listed telecommunications equipment manufacturer, emerge from a cloud of uncertainty created by trade restrictions imposed on it last month by the United States government.
Shenzhen-based ZTE is set to announce on Tuesday a new senior management team drawn up by its board of directors, company spokesman David Dai Shu told the South China Morning Post.
Dai said changes in senior management are regularly made by the company every three years, and that this week’s board meeting to determine the new leadership was a previously scheduled event.
“I cannot comment on the negotiations with the US government,” he said, referring to speculation about the timing of the management revamp.
Citing people familiar with the matter, the W all Street Journal reported on Saturday that ZTE chief executive Shi Lirong, along with executive vice-presidents Tian Wenguo and Qiu Weizhao, would step down as part of a deal reached with the US Department of Commerce, which slapped the firm with export restrictions over its alleged violation of longstanding trade sanctions on Iran.
The report said ZTE chief technology officer Zhao Xianming would be named the new chief executive.
ZTE chairman Hou Weigui said in a regulatory filing about two weeks ago that the board of directors will approve the company’s annual results on Wednesday. It was delayed pending ZTE’s assessment of the potential impact of the US restrictions on its business. Trading of its shares has been suspended since March 7.
The Bureau of Industry and Security under the US Department of Commerce made it difficult for suppliers to ship any American-made equipment and parts to ZTE since March 28. Suppliers subject to the US export curbs are required to apply for a licence to ship those items to the company.
A “licence review policy of presumption of denial shall apply” in this situation, ZTE said.
In January, ZTE’s preliminary estimates showed that it recorded a 43.48 per cent increase in net profit last year to 3.78 billion yuan, on the back of strong 4G network equipment and 4G smartphone sales.