ZTE’s new management looks forward to new era and sets compliance as priority number one

ZTE Corp, which has paid nearly US$2 billion in two separate fines to settle previous violations of a US export ban, will set compliance as its top priority in future, according to the company’s brand-new management team which last week took over the reins of China’s No. 2 telecommunications equipment maker.

In a letter to the company’s 80,000 employees signed by new CEO Xu Ziyang, the new management said it would learn the lessons from past mistakes which have caused heavy losses, adopt compliance as the strategic cornerstone of the company’s development, strengthen the compliance culture, promote internal controls and embed compliance in each routine work procedure.

“Led by the new board of directors, we will focus all resources on building the company’s compliance system, expanding our business, and creating value for our customers, and lead all employees to firmly and fearlessly embrace the future,” said the letter sent out to employees on Monday and obtained by the South China Morning Post.

ZTE declined to comment further on the letter.

ZTE replaced its management team last week with a cast of new names after the company had to terminate employment contracts with former senior management, including executive vice presidents and senior vice presidents, as part of a US settlement deal for previous violations of a US export ban for doing business with Iran and North Korea. The Shenzhen-based company also paid US$1 billion in fines and set aside US$400 million as escrow last month, which has resulted in a temporary lifting of the US export ban.