Shareholders of ZTE Corp will gather Friday at the Shenzhen headquarters of the Chinese telecoms equipment maker to approve sweeping governance changes, as part of conditions to be met before the US Commerce Department will lift a ban that cut off the supply of crucial American technology to the company. Since ZTE resumed trading on June 13, its Hong Kong-listed shares have more than halved in value. Trading was suspended for almost two months after the US Commerce Department reinstated an export ban on the company for flouting the conditions of a settlement for illegal sales to Iran. During that time, ZTE became the centre of trade talks between the US and China, with US President Donald Trump agreeing to a deal that has met with opposition in Congress. The US Senate has passed a defence policy bill that backs President Donald Trump’s call for a bigger, stronger military but would also repeal his deal to reopen Chinese telecoms company ZTE. Meanwhile, the US House of Representatives on Thursday approved a spending bill for the US Defense Department that includes an amendment that bars the Pentagon from buying goods or services from Chinese telecommunications giants ZTE and Huawei. US senators could agree to lift ZTE ban if it is hit with security limits Among ZTE’s shareholders are American investors including the California Public Employee's Retirement System (Calpers), Teachers Insurance & Annuity Association of America, the Bill and Melinda Gates Foundation Trust and the Texas Permanent School Fund. Other foreign investors include the New Zealand Superannuation Fund Authority, Government Pension Investment Fund of Japan and the Swedish national income pension system, according to financial data provider Bloomberg. It will vote along with management for all proposals except the one giving the authority to issue shares without pre-emptive rights. The New Zealand Super Fund said it has some passive equity holdings in ZTE and has been monitoring the situation since early 2016. “We are continuing to monitor the situation and will engage the company if deemed appropriate,” a spokeswoman said. ZTE stepping up expansion after posting strong interim profit ZTE’s shareholders will review a revised company charter and board rules as well as vote on director candidates. All current board members will resign after new directors are elected as part of the new settlement made with the US government, which required ZTE to replace its board and terminate all senior executives as well as anyone involved in the Iran violations within 30 days from June 7. These steps are being taken by ZTE to meet the conditions set by the US Commerce Department before it will lift an export ban on the company. ZTE’s major operations have ground to a halt after it was prohibited from buying products and services including semiconductors from US companies. Even so, a degree of uncertainty has permeated ZTE’s internal ranks, as the final decision to lift the ban lies with the US even if the company meets all of the terms. The company is strengthening its compliance procedures while waiting for the green light to resume operations. ZTE’s biggest shareholder, ZTE Holdings Co., has nominated eight new board members, five of whom are non-independent directors from state-linked companies that are shareholders of or have investment relationships. Three others, Cai Manli, Yuming Bao and Gordon Ng, have been nominated as independent non-executive directors. The voting will take place at ZTE’s headquarters in Shenzhen on Friday. ZTE shares slump 42 per cent as it moves to fire senior executives ZTE paid an additional US$1 billion fine last week and is finalising the details of an escrow account for the US$400 million surety payment. The company is suffering losses of several million yuan per day, exclusive of other miscellaneous penalties due to breach of contracts with some clients. It has also appointed a three-person team to oversee implementation of its settlement with the US government, which is working under conditions of high confidentiality and secrecy, after the company instructed all staff – even senior executives – to keep away from work that could decide the company’s fate. Tough ZTE penalty a costly reminder for firms to obey rules But even if the US lifts the export ban immediately, the company has estimated that smartphone sales this year may not even reach 50 per cent of the number achieved in 2017, a person familiar with the situation said earlier, who asked not to be named as the information is private.