Chinese telecoms equipment maker ZTE has appointed a new board of directors as part of its effort to have its crippling US trade embargo lifted.
As expected, the new board has strong links to the government in Beijing, just like the company's old board of directors. However, three of the eight have a legal background, and include one lawyer based in Hong Kong and two women.
The appointments were made late on Friday following a two-hour annual general meeting (AGM), according to the Nikkei newswire.
"Bao Yuming is a lawyer qualified to practice in mainland China and licensed with the US Supreme Court. The 46-year-old worked in New York and California for almost 10 years before returning to Beijing. The new director specialises in corporate law, trade and investment as well as intellectual property rights," according to Nikkei.
Gorden Ng, meanwhile, is a partner at law firm Dentons in Hong Kong and holds a master's degree in intellectual property rights from the University of London.
Only one of the five independent directors on the previous board had a legal background. Three were scholars, and one was an investment consultant, notes Nikkei.
The new board has been appointed at the behest of the US Department of Commerce after it activated a seven-year sales ban on US companies - and, effectively, anyone who does business with the US - on ZTE for breaking the terms of an earlier sanctions-busting agreement.
In March 2017, Shenzhen, Guangdong-based ZTE had agreed with the US Department of Commerce to pay a $1.19 billion fine and to fire a number of senior staff over sanctions-busting sales to Iran and North Korea.
A year later, the US Department of Commerce claimed that it hadn't fired the staff, as promised - and activated the clause in the agreement that gave the US the right to impose a seven-year sales ban on ZTE.
That ban, introduced in April, bars US companies from doing business with ZTE and brought the company's production lines to a halt in May as components dried up. ZTE relies on US companies for some 23 per cent of the parts that go into its networking hardware and smartphones, with no alternative sources available.
The reconstituted board is one element of a new deal with the US Department of Commerce made possible after President Trump vowed to help the company out.
Other elements of the deal includes payment of a further $1 billion fine, the placing in escrow of $300 million, to be confiscated if ZTE breaks any element of the new deal, and an audit board that will examine sales and report to the US Department of Commerce.
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