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ZTE Dives After Agreeing to $1 Billion Fine and Major Revamp

  • Its shares tank 42% in Hong Kong and fall also in Shenzhen
  • Revamp of board and managment exacerbates uncertainty
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ZTE resumes trading after reaching a settlement agreement with the U.S. Commerce Department. Peter Elstrom reports.(Source: Bloomberg)
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ZTE Corp.’s shares cratered after it agreed to pay at least $1 billion in penalties and overhaul its management as part of a sweeping settlement agreement that allows it to resume business after a two-month hiatus.

China’s second-largest telecoms equipment maker fell 42 percent as it resumed trading in Hong Kong following a suspension since April, when the U.S. imposed a ban on purchases of vital American technology in punishment for Iran sanctions violations. Its Shenzhen stock slid by the daily maximum of 10 percent. That wiped about $2.7 billion off ZTE’s market value Wednesday.