ZTE Vows to Shake Things Up After Securing a U.S. Reprieve

ZTE pledged to overhaul its flawed management and internal culture after striking a deal with the U.S. to get back in business after a damaging two-month hiatus, according to Bloomberg.

In a memo to employees, Chairman Yin Yimin promised to hold “relevant people“ accountable for a ban on purchases of American technology that threatened to smother China’s second-largest telecoms gear-maker. Yin, who took up his post in March 2017, said ZTE will restore operations swiftly once the issue is finally resolved.

ZTE’s candor mirrored withering criticism from state-run media since the imposition of the ban in April for violating Iranian sanctions then lying about it. It’s since become a focal point of a trade dispute between China and the U.S. In an online commentary, China National Radio warned Chinese firms shouldn’t be like ‘giant babies’ and rely on Beijing to bail them out when they run afoul of international laws.

“We must deeply realize that this issue in essence mirrored problems in our compliance culture and management,“ Yin wrote. “We should hold relevant people accountable and avoid similar issues in the future,“ he added, vowing to strengthen its compliance culture and internal controls.

The memo came hours after Commerce Secretary Wilbur Ross said ZTE will pay a record fine and replace its entire board of directors and senior leadership in exchange for lifting the ban. The moratorium is suspended for 10 years but can be activated should the company commit additional violations.

The company could be back in business by late this week. It should have few problems swallowing the financial fines given its roughly 30 billion yuan ($4.7 billion) of cash on hand.