Shares of American companies that supply chips and other components to Chinese telecom equipment maker ZTE Corp. rebounded strongly on Monday, after US President Donald Trump said that Washington and Beijing are working to get the company back into business.
Chinese telecom firm corp ZTE announced it has received a verdict from a US court which indicates its five-year probation from a 2017 guilty plea involving alleged illegal shipping of US technologies to Iran ended on Tuesday US time, marking an end to the years-long legal dispute between the Chinese telecom giant and the US government.
According to a statement released by ZTE on Wednesday, the verdict it received from a US court confirmed that the US court decided "not to revoke" ZTE's probation, meaning that no changes are made to past rulings about the probation. It also noted that no penalties are added along with the decision.
In the statement, ZTE expressed full confidence in the efficient operation and continued improvement of the company's compliance management system. It also said that the company will insist making compliance the "cornerstone" of its strategic development and "bottom-line" for its business operation.
News of the verdict lead to ZTE's shares hitting their trading limit almost immediately after the company's shares resumed trading on Wednesday afternoon on the Shenzhen stock market. The company's shares in Hong Kong also shot up by 26.99 percent as of press time.
ZTE had suspended trading of its shares on Wednesday morning in the two markets where it is listed.
In 2017, the Chinese telecom giant had pleaded guilty to charges from the US government that it violated US rules by shipping US made equipment illegally to Iran and North Korea.
In the wake of the acknowledgement, ZTE was put under a series of severe punishment clauses imposed by the US, including several fines that amounted $2.29 billion in total, a number which almost tripled the company's profits in 2017, a requirement to replace entire board of directors and senior leadership, as well as an order for the company to accept supervision from special compliance coordinators for a period of 10 years.
The US government also placed a ban on ZTE from buying components and software from US companies for a period of seven years in 2018 as one of the punishment measures for the company. The ban was never officially revoked, although the US government lifted certain parts of the export ban in 2018.
The company's business had suffered through a dark period following the US sanctions, but managed to stage a strong rebound in recent years. Last year, the company achieved a 12.9 percent in its sales revenues, while its net profits surged by 59.9 percent to 6.81 billion yuan, setting a record in the company's history.
Global Times
