ZTE remains fully committed to export control compliance. ZTE is striving to be a leader in export control compliance not only in China, but throughout the global industry.
On July 15th, ZTE announced that the U.S. Department of Commerce and the Company reached an agreement on the settlement and further steps required to terminate the Order, including payment of penalties pursuant to the agreement. The company has taken the required steps, and BIS terminated the Order, effective July 13. 2018 US EST. ZTE may now as of July 13 2018 US EST resume participating in new transactions involving items subject to the EAR globally.
As reported, ZTE officially started to work to recover the global business within hours after the Order terminated. In the effort of all employees, ZTE’s product line has been recovered. Shipments of domestic and overseas purchase orders have been recovered. IT system got recovered and verified. With the restoration of supply, ZTE’s global network maintenance and project delivery are begun successively. Meanwhile, ZTE received lots of supporting letters from customers and partners.
Smooth Transition to make sure operation stability
Within the one month of the Suspended Settlement Agreement signed, ZTE has met the requirements to change all members in the original board, and build a new board depending on the common decision in the shareholders’ conference. Besides, ZTE fired all management with positions of SVP and above as well as related employees, and appointed and recruited new management depending on the common decision of the board and company.
About handover, though it caused impact to change the board and management, the operation and strategy of the company were never shaken from shareholders’ level without material influence on project implementation, whilst the company will take actions to make sure the operation stability.
In the letter issued by ZTE on July 9th, the new CEO, Xu Ziyang said, we will focus all our forces on building company’s compliance system, business development and creating value for our customers, leading our staff to face the future firmly and bravely. He stressed, we will do our best to keep the company in a smooth transition and lowest the impact.
Core competitiveness is not affected
Talents are the most valuable treasures of ZTE. The R&D wasn’t affected. ZTE keeps its core capability, especially the stable backbone R&D team. Under the guide with compliance, most of the program of R&D wasn’t affected. 5G capability is still being promoted. ZTE has confidence that its R&D will recovered to normal in short time after the termination. As a company with around 80,000 employees, there’re only 100 differences in the quantity of employ quit between this year and last year in the same period, which means ZTE hasn’t lost core capability. Next, ZTE will continue on stabilizing backbone talent team.
Customers are steady and confident of ZTE. ZTE will try its best to save the damage. Since the accident, the company’s normal manufacture and operation barely ran which caused new projects were affected. ZTE will take all actions to reduce the loss including the trouble of customers’ equipment maintenance, even though, most customers were still confident of ZTE and waiting for the termination. In the last few days, ZTE has got new projects from all three mobile operators in China. They have also got new purchase orders in Algeria, Thailand and other oversea markets.
Suppliers are steady and supported ZTE a lot. In the past 2.5 months, the company united holding two basic principles. The first is compliance. ZTE insisted on compliance no matter what difficulty it was facing. The second is faith with compliance. Though the manufacture and operation were paused, the company insisted on the responsibility to partners including banks and suppliers. During the accident, there was no any default on payments to suppliers. Most of suppliers were supporting ZTE as they always and hope the ban could be lifted soon.
Investors are confident and supported. ZTE’s A shares rose by 9.99% to CNY 17.06, totally rose 41% in last 4 trading days, which shows ZTE is being recognized by the capital market. – Communications Today Bureau