ZTE given temporary reprieve from US

China's embattled ZTE Corp has received a temporary reprieve from the US government to conduct business needed to maintain existing networks and equipment as it works toward the lifting of a US supplier ban.

ZTE, which makes smartphones and networking gear, was forced to cease major operations in April after the United States slapped it with a supplier ban, saying it broke an agreement to discipline executives who conspired to evade US sanctions on Iran and North Korea.

The authorization seen by Reuters from the US Commerce Department's Bureau of Industry and Services runs from July 2 until Aug. 1.

It allows China's No.2 telecommunications equipment maker to continue operating existing networks and equipment and provide handset customer support for contracts signed before April 15. It also permits limited transfer of funds to or from ZTE.

On Tuesday, ZTE also announced the departure of 1 senior executive in a stock exchange filing, while a source who saw an internal memo told Reuters seven others were removed. As part of its settlement agreement reached in June with US authorities, ZTE had promised to radically overhaul its management.

The company also agreed to pay a $1 billion penalty and put $400 million in an escrow account as part of the deal to resume business with US suppliers - which provide almost a third of the components used in ZTE's equipment.

ZTE said in exchange filings late on Tuesday that Xu Weiyan, a shareholders' representative supervisor in the company's supervisory committee, has resigned due to personal commitments with immediate effect and no longer holds any position in the company.

An insider source told Reuters a memo was sent out on Tuesday announcing the removal of seven other executives, without providing a reason. They included vice presidents Wang Keyou, Xie Jiepeng and Ma Jie, who were in charge of the legal, finance and supply chain departments, respectively.

Reuters could not immediately contact them for comment. The source declined to be identified due to the sensitivity of the matter.