China's ZTE shares plummet 39pc as trading resumes after two-month ban

Published: June 13, 2018 11:22:31 | Updated: June 14, 2018 11:27:24


Reuters photo

Shares in Chinese technology company ZTE has plummeted 39 per cent in Hong Kong on Wednesday as trading in the firm resumed after a two-month suspension.

In April, the US Commerce Department found ZTE had violated trade bans with North Korea and Iran.

A ban was placed on the firm that prevented it from buying parts from US suppliers, according to a BBC report.

Best Ad

The ban forced ZTE to suspend major operations, and trading in its shares were halted on 17 April.

Last week, the US reached a deal with the Chinese technology giant that would remove the ban.

The deal will involve ZTE paying a $1 billion penalty and hiring a US-approved compliance team. It will also have to replace its management board.

ZTE, which is based in Shenzhen, is China's second biggest telecoms maker. It depends on US-made components for the production of handsets.

In Shenzhen, the firm's shares were down 10 per cent in early trade, which is the maximum allowed on the mainland.

The share falls in Shenzhen and Hong Kong were widely expected.

The decision to lift the US ban on ZTE has faced sharp criticism from US politicians, including from some Republicans.

US Senate leaders from both side of the political fence are expected to vote later this week on an amendment to a bill that could block the agreement between the Trump administration and ZTE.

Share if you like