HONG KONG- On Wednesday, June 13, 2018- Chinese telecommunications giant ZTE Corp. wiped off approx. $3 billion its market value as it regained its power in trade after the agreement to pay up to around $1.4 billion in penalties to the U.S. government.
The Hong Kong-listed shares of ZTE decreased as much as 41 % to HK$14.98, their lowest in a year, following a two-month trading suspension, while its Shenzhen shares fell by their 10 percent limit after it confirmed details of the agreement publicized by the U.S. government on Monday.
Confirming about the details of the deal, ZTE reported on Tuesday that it would also replace its board of directors and that of its import-export subsidiary ZTE Kangxun within 30 days of the June 8, the order being signed by the United States.
It said, ‘all members of its leadership at or above the senior vice president level would be removed from the post within the 30-day period, with a commitment that they would not be re-hired again, along with any executives or officers tied to the wrongdoing’.
on Tuesday, It also said in filings that it would work to restart the operations as soon as possible after the ban gets over, and would also republish its first-quarter financial results after assessing the impact of the ban and the after the settlement of the agreement. The case has become highly politicized and a main key focus of bargaining talks as Washington and Beijing look to avert a trade war. U.S. lawmakers, have attacked Washington’s agreement with ZTE and plan legislation to roll it back, citing intelligence warnings that ZTE poses a national security threat.
ZTE, with its given market value of approx. $20 billion, before all of the shares, were suspended in April, is now the world’s fourth-largest telecom equipment maker.