Mon, Jul 09, 2018 - Page 16 News List

ZTE executive describes humiliation in farewell letter

Reuters, HONG KONG

A departing senior executive at China’s ZTE Corp (中興通訊), which is fighting a crippling US supplier ban, on Friday said in a letter to staff that his departure amid a Sino-US trade war was “deeply humiliating.”

Zhang Zhenhui (張振輝) is one of scores of executives at China’s No. 2 telecommunications equipment maker that have been ordered to leave as part of a US$1.4 billion settlement deal the company made with the US last month to end a seven-year supplier ban.

As part of the settlement, ZTE agreed to pay a US$1 billion fine, put US $400 million in escrow and hire a US-appointed compliance monitor.

It also agreed to replace its board and remove all members of its leadership at or above senior vice-president level within 30 days, along with any executives associated with the wrongdoing.

Zhang, who was one of five executive vice presidents at ZTE and in charge of sales and marketing, issued a farewell letter to staff.

“In the environment of a Sino-US trade war, in the ‘white terror’ of a technology war, all executive presidents including me have signed termination contracts to formally leave the company yesterday,” Zhang said in the letter, which was circulated online on Saturday.

A spokeswoman for ZTE declined to comment.

ZTE was in 2016 found guilty of having sold products incorporating US technology to restricted countries including Iran, violating US export rules.

It managed to avoid a seven-year supplier ban after reaching a settlement agreement with the United States in March last year that included a US$1.2 billion fine.

The US reinstated the ban this April, saying that ZTE had failed to punish the executives involved as agreed.

Despite a provision in the settlement agreed last month that allowed the US to exempt certain executives, all members of ZTE’s former board and former senior management team have left the company.

Company insiders told reporters that nearly two dozen senior executives left ZTE on Friday.

Some employees and analysts have expressed doubt over whether a new board and management team could settle in quickly enough to lead the company out of the woods, even after the ban is lifted.

In the letter, Zhang also praised long-time rival Huawei Technologies Co (華為) and said he truly wished that Huawei, as a Chinese company, could “straighten up its spine and face inevitable challenges in the future.”

Huawei, the world’s largest telecom equipment maker, has long been under scrutiny in the US, which views it as a risk because of its alleged links to the Chinese government, which the company has denied.

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