Just days after being fined a record $1.2 billion for breaking U.S. sanctions with Iran and North Korea, ZTE has named Yin Yimin Chairman of the Board. Yimin replaces Zhao Xianming who will remain with the company as its president and executive director.
ZTE said in a statement that it is separating the roles of chairman and president and that Xianming’s resignation from the chairman position is not an indication of any problem with the board.
Yimin is a controlling shareholder in ZTE and served as the company’s president from 2004 until 2010.
Meanwhile, Xianming has only been with the company about a year. He was named chairman and CEO in April 2016. One of his main tasks was to improve the company’s export compliance program. During his tenure, he installed a new compliance committee with the intention of overhauling the company’s compliance program. He also restructured ZTE’s legal department and separated it from the compliance department.
Last week ZTE was fined $1.2 billion for breaking U.S. sanctions by shipping equipment made with U.S. components to Iran and for sending telecom equipment and software made in the U.S. to North Korea.
The company said it will pay a criminal and civil penalty of $892 million and an additional penalty of $300 million to U.S. Commerce Department’s Bureau of Industry Security (BIS). The $300 million will be suspended during a seven-year probationary period on the condition the company complies with the agreement.
Earlier this year Reuters reported that ZTE was planning to cut about 3,000 jobs or about 5 percent of its 60,000 employees. Like many telecom infrastructure vendors, ZTE is suffering from the gap between 5G equipment sales starting and 4G equipment sales lagging.