Replies to post #423006 on InterDigital Inc (IDCC)

[squingeqbob]

Olddog - I did a random search on the phrase “Price is just the tip of the Iceberg. Dig deeper” and it looks like this article is just boilerplate - the author or authors simply substitute the name of whatever company they are trying to influence price wise. IMO

[jjff]

THIS SHOULD HELP, CAN YOU FIND SOME MORE POSITIVE ARTICLES? LOL

[Paullee]

ZTE Replaces Board, but Power Structure Remains
Moves come in response to U.S. penalties that have devastated Chinese company’s business

By Dan Strumpf and
Wenxin Fan in Hong Kong and
Kate O’Keeffe in Washington, D.C.
Updated June 29, 2018 2:54 p.m. ET
6 COMMENTS

ZTE Corp. ZTCOY 2.50% replaced its board of directors on Friday to satisfy U.S. authorities’ demands and secure a deal to save the Chinese telecom giant’s stricken business, but the changes may be less sweeping than they appear, a Wall Street Journal review of corporate records found.

All 14 directors, including Chairman Yin Yimin, resigned from ZTE’s board. The company named eight new directors as part of an overhaul that includes the firing of dozens of top executives. The incoming board members, however, were handpicked by ZTE’s state-backed controlling shareholder, filings show, and the majority are veteran officials of the shareholder or its state-backed parent companies.

At least two of ZTE’s outgoing directors may also continue to wield influence over the firm because they hold stakes in a company that owns part of the shareholder, a holding company called Zhongxingxin. The U.S. Department of Commerce demanded new leadership at ZTE but it doesn’t require any executives or directors to divest stakes.

The reshuffle at ZTE may end up resembling “musical chairs,” said Mark Stokes, a former China director in the Office of the Secretary of Defense. “If you want real change in leadership, you’d probably have to target the actual institutions behind those people,” said Mr. Stokes, who is now executive director of the Project 2049 Institute, an Arlington, Va.,-based think tank.

The settlement sets “a new standard for protection of American technology,” Commerce Secretary Wilbur Ross said in a statement to the Journal. “Removal of the directors and executives will have a deterrent effect on other individuals at ZTE and elsewhere, by showing that violative behavior has consequences for the individuals involved,” Mr. Ross said.

“There is no basis for requiring shareholders of a public company to pick our director candidates, nor for requiring the largest shareholders to divest,” he added.

A spokeswoman for ZTE, which is publicly traded in Hong Kong and Shenzhen, declined to comment.

The Commerce Department in April banned American companies from selling components and software to ZTE that the Chinese company needs to make smartphones and telecoms gear. The ban, which remains in effect, was instituted to punish ZTE for violating the terms of an earlier deal meant to settle allegations that it engaged in sanctions-busting sales to Iran and North Korea. The penalty threatened to kill ZTE’s business.

After U.S. President Donald Trump intervened, the Commerce Department struck a deal earlier this month to overturn the ban if ZTE agreed to personnel changes, paid a $1 billion fine, placed another $400 million in escrow and agreed to be monitored by U.S. compliance officers for 10 years.

The continuing influence of key personnel and Chinese state actors in ZTE’s affairs adds ammunition to critics of the deal, which was brokered by the Trump administration amid a broader trade fight between the U.S. and China. A large, bipartisan group in Congress is advancing legislation to ensure that the April sales ban remains in effect.
Why Trump’s ZTE U-Turn Has Sparked Backlash
President Trump’s mixed messages about a plan to help controversial Chinese telecom giant ZTE has baffled Washington. WSJ's Shelby Holliday breaks down three reasons why lawmakers see the company as a threat. Illustration: Adam Falk

“The seemingly endless pitfalls and loopholes that come with the administration’s bad ZTE deal, including the board restructuring, are exactly why the administration shouldn’t be bending over backwards to help the government of China while they threaten our nation’s jobs and security,” Senate Minority Leader Chuck Schumer said in a statement to the Journal.

The New York Democrat, with fellow senators including Tom Cotton (R., Ark.), Marco Rubio (R., Fla.), and Chris Van Hollen (D., Md.), embedded language in a defense bill that passed the Senate earlier this month that could preserve the April ban if the measure is also approved by the House of Representatives—and not vetoed by Mr. Trump.

Though ZTE counts global asset managers, including BlackRock Inc. and Vanguard Group, among its investors, its biggest and most powerful shareholder is Zhongxingxin. The company, described in ZTE’s annual report as its “controlling shareholder,” owns a 30% stake.
Wired for Influence
Outgoing board members of ZTE will retain power in the company through their stakes.

ZTE

30.3%

69.7%

Other investors

Zhongxingxin

48.5%

51.5%

Xi’an

Microelectronics

Zhongxing WXT

Guoxing Ruike

Aerospace

Guangyu

State-owned

Private companies with stakes owned by some outgoing board members

Note: As of Dec. 31, 2017

Sources: ZTE, company filings

Zhongxingxin is in turn almost half-owned by two government-run firms, Xi’an Microelectronics and Aerospace Guangyu, according to ZTE company filings. The rest of Zhongxingxin is owned by two private companies comprising 42 individuals, including two outgoing board members: Mr. Yin, the former chairman, and Wei Zaisheng.

Also among them are Li Guangyong, a ZTE vice president who has been assigned to handle the removal of some ZTE executives, according to an internal ZTE memo, and ZTE founder Hou Weigui. Mr. Hou left ZTE’s board in 2016 after the firm was accused of violating the U.S. sanctions.

Messrs. Yin, Wei and Li didn’t respond to the Journal’s inquiries. Mr. Hou couldn’t be reached for comment.

Five out of eight Zhongxingxin picks for ZTE’s next board of directors are individuals with long histories at the state-backed entity. They include Li Zixue, the deputy head of Xi’an Microelectronics and its Communist Party secretary, and Li Buqing, a director of Aerospace Guangyu, according to biographies released by ZTE.

ZTE was co-founded in 1985 by a state-owned company, and Zhongxingxin was set up during China’s 1990s telecom boom in order to give company leaders ownership stakes. ZTE’s ownership structure, in which top leaders retain stakes and ownership is divided between state-owned enterprises and ordinary investors, isn’t unusual for a large Chinese firm, according to Christopher Balding, a professor at Peking University’s business school in Shenzhen.

“At the same time, if your focus is whether this is going to change their business practices,” he said of the U.S. settlement, “it should cause an enormous amount of concern because essentially you haven’t changed who owns and influences what’s going on in the company.”

Write to Dan Strumpf at [e-mail], Wenxin Fan at [e-mail] and Kate O’Keeffe at [e-mail]