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ZTE Shareholders Question Board About Responsibility For The US Ban

ZTE Shareholders Question Board About Responsibility For The US Ban
The shareholders asked the management of ZTE Corp about who should be blamed the company landing in dire straits.
This was in relation to the company’s share price falling by over 60 per cent after export ban on the company by the US administration.
The explanation reportedly obviously left the shareholders unsatisfied as they exited the 2 hour meeting.

“I think the company should take more responsibility,” sone such investor told the media outside the meeting. “The management offered no concrete solutions at the AGM, which is quite disappointing to me.”

enough time was to address the concerns of the shareholders was not given by the company management, alleged another shareholder.
“They didn’t give me a chance to ask all the questions, the time was too short,” the investor said. “Regarding the export ban, the management should answer the question whether this was a natural or man-made disaster. I think it’s man-made … They kept emphasising external factors, yes, there are indeed external factors, but the main reason is they didn’t do their part properly.”
The investor further said that he would not sell the shares of the company, which was substantial in number, because he felt that at the current levels, the shares were “undervalued” and in the long run would give good returns. “But if the US does not lift the ban, the outcome will be difficult to predict,” he said.
There were no comments from ZTE about the closed-door shareholder meeting.
One of the reasons that the shareholders did not get satisfactory answers to their queries was probably because the management and board of the company that is headed by Chairman Yin Yimin, are set to move out of the company.
That was one of the preconditions that the company had accepted when it struck a new deal with the US Commerce Department. The US had demanded that ZTE must replace all of its senior management executives and its board in addition to anyone who was involved in the Iran violations within a time period of 30 days starting June 7.  All current board members will resign after new directors are elected.
It has been reported that at the shareholder meeting, Yin said that he felt personally ashamed and apologized for the financial losses to the company and the shareholders due to fall in share price, reported the National Business Daily.
Despite the “unfortunate incident” the company would be soon able to get back to being normal and recover on the losses as soon as the ban is lifted because the company has bene able to maintain its core competencies, specifically in research and development, Zhao Xianming, the company’s CEO, reportedly said.
For the US$400 million surety payment, last week the company paid an additional US$1 billion fine. Losses amounting to several million yuan per day is being suffered by the company in addition to other penalties arising out of breach of contracts with some clients.

Christopher J. Mitchell

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