ZTE’s stock rallied by 17 per cent after the United States lifted its supplier ban. The lifting of the ban was activated after the US Department of Commerce announced that the company deposited $400 million in an escrow account, to be held to cover future violations.
The company’s Hong Kong-listed stock opened up 5.5 per cent, Reuters reports, and it rose more than 17 per cent by midday. The stock was 37 per cent lower than it was in April when trading was suspended for two months after the ban, the news gathering service noted.
The US Commerce Department issued the ban in May after the government determined that ZTE violated terms of its 2017 settlement by failing to fire or punish employees involved with illegally shipping US equipment to Iran and North Korea.
The seven-year ban crippled the company, which shut down major operations and left it unlikely to survive — until President Donald Trump said that he wanted the Commerce Department to work with ZTE on getting the ban lifted.
In June, the Commerce Department made a deal requiring ZTE to pay a total of $1.7 billion in penalties, including a $1 billion fine and the $400 million escrow deposit — kicking off the long recovery process.
