In a statement on the Hong Kong stock exchange, Xiaomi said the decision to file a lawsuit against the United States is to protect the company’s interests. The company filed, last Friday (29), a complaint in a Washington district court against the departments of Defense and the Treasury of the country.
In particular, the Chinese manufacturer is suing the Department of Defense, the Department of the Treasury, Secretary of Defense Lloyd Austin and Secretary of the Treasury Janet Yellen. The reason is that she and eight other Chinese companies are on the list of Pentagon blockades by the Donald Trump administration.
According to Xiaomi, the US decision to list the company as a “Chinese communist military company” is “factually incorrect”. The company asks the courts to declare the decision illegal.
As a counterpoint, the company claims that three of its ten largest holders of common shares are from the United States. Also, that 75% of the company’s voting rights are commanded by co-founders Lin Bin and Lei Jun, and there is no “ownership or control of an individual or entity affiliated with the army [chinês]”.
Prohibition postponed by Biden
Xiaomi was added to the list by the Trump administration a few days before Joe Biden took office. The new president has postponed the investment ban date from January 28th to May 27th, which will give his team time to review the policy and companies already added previously.
A slightly more mitigating case is that of Huawei. The company, since being added to the list, has been banned from doing business with others in the US. Since then, Google has stopped providing access to its services to Huawei, which had to sell the Honor sub-brand. Sales figures also fell, making room for Apple to rise again in the ranking of the world’s largest manufacturers.
With the action, the Department of Defense requires US investors to undo their stakes in listed companies.