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The chairman of ZTE will be airborne

via:CnBeta     time:2018/6/14 7:02:16     readed:361

Among them, the "Articles of Association" is intended to delete "the chairman must be from the person who has served as a director or senior management of the company for more than three years", and the two clauses are changed to the requirements of the independent non-executive directors.

In addition, the shareholders' meeting will review the company's 2017 annual report, the work report of the board of directors, the work report of the board of supervisors, the comprehensive mining work report, the financial final report, and the profit distribution plan. ZTE plans to distribute 3.3 yuan in cash for its shareholders for every 10 shares. The shareholders' meeting will also vote on a number of proposals such as the appointment of overseas auditing agencies for the year 2018 and the company’s intention to apply for a comprehensive credit line.

According to the announcement, the shareholders’ meeting approved ZTE to apply for a comprehensive credit line of RMB 30 billion to Bank of China Co., Ltd.;DevelopmentShenzhen Branch of the Bank applied for a comprehensive credit line of US$6 billion; ZTE provided a joint-liability guarantee guarantee for ZTE’s medium and long-term debt financing not exceeding US$600 million.

Executives face a big shake-up and the ownership structure will change

After the general public are concerned about the big shakeup of the executives, who will take control of ZTE? Informed sources told the Beijing News reporter that ZTE had to find someone from the original entrepreneurs to stabilize the situation, because the people transferred from the outside did not understand ZTE.

According to informed sources close to ZTE, in the next 30 days, ZTE parties should negotiate their shareholding structure and expect some adjustments.

A former ZTE employee told reporters that the key is to see how the subsequent equity structure of ZTE changed. If there is no major change, pick some from the original Napa business veterans. If we want Wei Xiantong to withdraw, all senior executives who are senior vice presidents have now been fired, so there is really no suitable candidate. But the removal of the above terms indicates that the chairman or airborne.

A number of people close to ZTE’s top management disclosed that from the current conditions, the chairman of ZTE will be airborne, “the probability is that all people will become presidents.”

Zhu Weimin, who was born in 1966, is an "old Zhongxing". This time he was nominated as a non-independent director of the seventh session of the board of directors. The term of office expires on the date of deliberation and approval of the seventh session of the board of directors of the company from March 29, 2019) Only.

At present, the main shareholder of ZTE Corporation is Shenzhen Zhongxing New Communication Equipment Co., Ltd. (abbreviated as “Zhongxing”), holding 30.34% of the shares, while Zhongxing Xinda is Shenzhen Zhongxing Victim Equipment Co., Ltd. (abbreviated as “Zhongxing” Pass "), holding 49%. Zhongxing Wei Xiantong is a private company that is 100% invested by Hou Weigui and 38 early ZTE entrepreneurs and current ZTE executives as natural persons. Its chairman, Hou Weigui, holds 18% of the shares and Yin Yimin holds 5% of the shares.

As part of the settlement agreement between the two parties, ZTE needs to replace all board members of the company and ZTE within one month and is now the senior vice president and all the above senior leaders. The 12th announcement pointed out that within 30 days after the replacement of the board members, ZTE should set up a special audit/compliance committee consisting of three or more new independent directors on the board of directors. The chairman of the board may serve as a member of the committee but may not serve as chairman of the committee.

Earlier, media reports said that ZTE has lifted the positions of two senior executives. Xu Huijun, executive vice president and chief technology officer of ZTE, and Huang Dabin, who is responsible for the company's operations, no longer fulfill their regular duties.

After consulting the business registration information, the reporter found that on May 29 this year, ZTE Corporation changed the records of senior management personnel (directors, supervisors, managers, etc.).

On April 5, 2016, ZTE held the first meeting of the seventh session of the Board of Directors. The meeting was reviewed and nominated by the board of directors and company executives. According to the announcement, the term of office of the new senior management officer will begin on the date of deliberation and approval of the board of directors of the company until the expiration of the term of office of the seventh board of directors (ie March 29, 2019).

In April 2016, ZTE Corporation issued an announcement that the original CTO Zhao Xianming was elected chairman and concurrently the CEO. Shi Lirong, the former CEO, was not among the senior managers of the new Zhongxing Group, but was still elected as a member of the Nomination Committee of the Seventh Board of Directors. In addition, Zhong Wenyuan’s Executive Vice President Tian Wenguo and Qiu Yizhao left office. According to media reports, Shi Lirong, Tian Wenguo and Qiu Weizhao were all involved in the US export embargo against ZTE.

8 newly appointed directors, many of whom are ZTE shareholders

On the evening of the 13th, ZTE Corporation announced the disclosure of a total of five candidates for non-independent directors, both of whom are shareholders or indirect shareholders of ZTE's controlling shareholders. Among them Zhu Minhe and Fang Fang used to hold positions in ZTE Corporation; there were 3 independent independent non-executive director candidates. Cai Manli has the background of the CSRC. Bao Yuming holds the qualifications of the Supreme Court of the United States and China; Wu Jundong owns England, Wales and China. Hong Kong lawyer qualifications and experience in listing and mergers and acquisitions.

Of the five non-independent director candidates, Zhu Weimin began working in the ZTE Semiconductor Development Department in 1991 and served as the deputy general manager of ZTE Holdings; in 2018, he served as chairman and director of Zhongxing International Investment Co., Ltd. and some of its subsidiaries, and also served as Zhongxing. Directors of companies such as Wei Xiantong are Zhongxing New Shareholders of ZTE Holdings.

Fang Hao began his career with Zhongxingxin in 1995 and has been the director and executive vice president of Zhongxing Development Co., Ltd. since 2009. He is also a shareholder of Zhongxingxin, a controlling shareholder of ZTE Corporation.

In addition, Li Zixue and Li Buqing are all shareholders of ZTE's Zhongxingxin. Gujunying is an indirect shareholder of ZTE's Zhongxingxin.

Among the three independent non-executive director candidates, Cai Manli served in the China Securities Regulatory Commission from 2002 to 2015. From 2015 until now he has served as the general manager of Yi Ruisheng Asset Management Co., Ltd. and senior consultant of King & Wood Mallesons Law Firm. Since 2016, he has also served as Sichuan Xinwang Bank. External auditor of a company limited by shares.

In addition, Yuming Bao (Bao Yuming) is qualified as a Chinese lawyer and qualified as a barrister at the U.S. Supreme Court. Mr. Wu Jundong holds a master's degree in intellectual property and is qualified as an attorney in England and Wales and Hong Kong, and has experience in listing and mergers and acquisitions.

Still under the influence of the ban, the time of resumption of work is unknown

The Beijing News reporter learned from a number of sources that ZTE employees will return to work as soon as June 14. An industry source stated that ZTE not only pays full wages for employees in order to retain overseas employees and even pay new employees. However, for the resumption of work news, ZTE said that the company announcement shall prevail.

ZTE Shandong Branch staff told reporters that the company has not yet notified the specific start time. However, the company notified one month ago that it was ready to start. According to the company's requirements, even if it can not work, it must be ready to start at any time. Starting is inevitable, and we have been working hard to make this preparation. "During the work stoppage period, our salary was paid and front-line employees were not affected. There was a partial adjustment in the leadership."

According to an insider of China Mobile, the ZTE engineers stationed at the mobile station were mostly anti-contractors (project contractors). They were not officially employees of ZTE, but the contracts were signed with ZTE and ZTE also worked for China Mobile. . Owned personnel, some of the original resident, follow-up mobile interface, did not withdraw, do not let work, stay every day, pay monthly salary. Individuals evacuated. "The project contractor did not work, but first withdrew, and raised it with a very low base salary, but many people took the opportunity to leave the job." "At present, it has not returned to work and has not resumed work."

According to informed sources close to ZTE, for ZTE, the most critical thing now is to resume product delivery and service to customers and restore customer relationships after the US Department of Commerce’s ban expires. At the same time, the re-establishment of internal employees, external supply chain, capital and media public opinion on ZTE's confidence.

On December 12, ZTE’s announcement indicated that it will resume its business activities affected by the refusal orders of April 15, 2018 as soon as possible after the BIS terminated its refusal order on April 15, 2018. In addition, under the new settlement agreement, the U.S. Department of Commerce can only lift the ban on ZTE’s business dealings with U.S. companies after ZTE has paid a total of US$1 billion in fines and US$400 million in guarantees.

A ZTE internal employee told the reporter that during this time, the company has made all-round preparations. Once the refusal order is lifted, it will restore the service to customers and partners for the first time. Now it is patiently waiting for the United States to lift the refusal order.

According to a summary of the 2017 annual report disclosed by ZTE, its expenditure on wage-related expenses for the year was RMB 21.11 billion, an increase of 8.8% year-on-year. The financial report for the first quarter of 2018 before adjustment shows that the related cash such as wages for employees after the merger of subsidiaries was 3.903 billion, an increase of 3.1% year-on-year.

■ Related News

ZTE "Shock" resumes trading after 56 days

On June 13, the 56-day suspension of ZTE A+H shares was resumed. Among them, A shares opened lower limit, H shares fell 41.56%. Prior to this, a number of fund companies adjusted the valuation of ZTE held by their funds

On the 12th, the announcement showed that the BIS (US Department of Commerce’s Bureau of Industry and Security) passed the “Alternative Order on ZTE Corporation” approval agreement immediately after June 8 (U.S. time). ZTE Corporation will pay a total of US$1.4 billion in civil Fines, replacement of all board executives within 30 days, appointment of coordinator supervisor, 10-year refusal order, etc. Prior to this, ZTE had already paid a fine of 890 million U.S. dollars. At this point, its repurchasing price was a total of more than 2.29 billion U.S. dollars (approximately 14.6 billion U.S. dollars).

According to the summary of ZTE's 2017 annual report, the annual operating income was RMB 108.82 billion, and the net profit attributable to common shareholders of listed companies was RMB 4.568 billion (approximately US$ 714 million). The $1.4 billion that will be paid is equivalent to nearly twice the net profit of ZTE last year.

On April 20, Yin Yimin, chairman of ZTE, stated that the sanctions imposed by the US Department of Commerce had caused ZTE to enter a state of shock.

related articles:

The value of ZTE evaporates over 16 billion yuan a day

ZTE and the United States reach an alternative settlement agreement

ZTE will apply for 30 billion yuan + 6 billion U.S. dollar credit line from the bank

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