China’s ZTE Stock Prices Plummet After US Deal
Shares of embattled Chinese telecommunications giant ZTE plunged more than 40 percent Wednesday, its first day of trading after agreeing to pay a $1 billion fine to the United States for violating trade sanctions.
ZTE nearly went under after the Trump administration imposed a seven-year ban on the company from buying crucial software and hardware components for its smartphones and other devices from U.S. companies. The ban was punishment for ZTE putting U.S.-built components in its products and selling those goods to countries under a U.S. trade embargo, including Iran and North Korea.
The sanctions were lifted after ZTE agreed to pay a $1 billion penalty, put another $400 million in escrow, and replace its entire management and board by the middle of July.
The company is also required to hire a new compliance team selected by the U.S. Commerce Department for a 10-year term.
A bipartisan group of U.S. lawmakers have introduced legislation to reimpose the penalties on ZTE, saying the firm posed a threat to U.S. national security through intelligence gathering on its devices.
Source: Voice of America