ZTE has appointed eight new executives to its board as it seeks to overturn a seven-year ban from dealing with US suppliers.
Lie Zixue has been elected as the new chairman of the company, while the other seven new members comprise executive and non-executive directors.
Meanwhile, at the company’s AGM, shareholders vetoed a proposal to distribute $209 million in dividends, according to Reuters.
The Chinese smartphone and telecoms network equipment manufacturer is required to change its management team, dismiss any employee at a senior vice president level or above and pay the US government a $1 billion fine for the ban to be overturned, with a further $400 million held in escrow.
The ban was issued to ZTE for breaching a previous agreement for illegally shipping products to North Korea and Iran. ZTE was obliged to discipline executives involved in the scandal but failed to do so.
President Donald Trump personally intervened to find a solution to the situation, leading to the new arrangement. However the deal could face opposition from US lawmakers who have already passed a defence bill that included an amendment that could block the rescue plan. Senators have also written to Trump, urging him to re-instate the ban.
ZTE has claimed its survival is at risk as it sources as much as 30 per cent of its components from the US. Its shares have lost 60 per cent of their value since trading resumed following a two-month suspension and there are also concerns that the new board will result in a period of uncertainty that might hinder the possibility of a turnaround.
The company has apologised for the scandal, while the Washington has made it clear that if ZTE infringes once again then the US would not hesitate to shut it down.
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