Three top executives to leave ZTE as part of US agreement - reports

Three top level ZTE executives are set to leave the company this week as the board looks to make amends over recent trade sanctions placed upon the Chinese vendor by the US.

Sources cited by the WSJ say ZTE is doing its best to rebuild its reputation following the sanctions slapped on it by the US department of commerce. The trade sanctions came as a consequence of alleged trade of US-made equipment with operators in territories embargoed for trade with by the US, including Iranian operator TCI.

Now, Chief Executive Shi Lirong and EVPs Tian Wenguo and Qiu Weizhao will be stepping down from their posts, and it is believed that CTO Zhao Xianming will be taking up the reigns as CEO and chairman, according to the WSJ. The removal of three senior execs form part of the make-peace agreement with the US, which says anyone involved in the violation of trade sanctions must be removed from office. Then, and only then, will the US consider a permanent lifting of trade sanctions.

It has also been alleged that a document seized by the US government as part of the sanctions reveal ZTE conspired to deliberately circumvent US exporting rules by setting up shell companies to ship US-made goods out to Iran. The sanctions, which have temporarily been lifted, mean ZTE was unable to trade with US companies, including partners Intel and Qualcomm.

Not only did the sanctions prevent the Chinese vendor from trading within the US, it also allegedly barred any dealings with US-owned technologies manufactured anywhere in the world. It would appear ZTE’s arm has been twisted into coercion, as the firm desperately attempts to avoid the potentially devastating business consequences of the US-imposed trade sanctions.