HONG KONG/SHENZHEN (Reuters) - The chairman of ZTE Corp (000063.SZ)(0763.HK) apologized to staff and customers on Friday after the Chinese technology firm agreed to pay a $1 billion fine to the United States to end a ban that has crippled key businesses, including smartphones.
The ban, which traces back to a breach of the U.S. embargo on trade with Iran, had prevented China’s second largest telecoms equipment maker by revenue from buying the U.S. components it relies on to make phones and other devices.
In addition to the fine, ZTE agreed to overhaul its leadership in exchange for lifting the ban. In a memo to staff, Chairman Yin Yimin said ZTE would look to get back into business as soon as possible, and hold those responsible for the breach accountable, a company source said.
“This issue reflects problems that exist with our firm’s compliance culture and at management level,” Yin wrote, according to the source, adding the incident was caused by the mistakes of a few ZTE leaders and employees.
He added the U.S. ban had caused “huge losses for the company” which had been forced to pay a “disastrous price.”
ZTE did not respond to repeated requests for comment.
ZTE pleaded guilty last year to conspiring to evade U.S. embargoes by buying U.S. components, incorporating them into ZTE equipment and illegally shipping them to Iran, paying
