Xiaomi pushes to clear name after court suspends US investment ban on the firm

A US court ruled against a Department of Defence ban, which prohibits US investors from owning shares in Xiaomi because of alleged Chinese military ties

Xiaomi sued the US departments of defence and treasury in January, seeking to undo the ban

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A pedestrian walks past advertisements at a Xiaomi Corp store in Hong Kong on December 2, 2020. Photo: Bloomberg

Published: 2:21pm, 13 Mar 2021Updated: 2:57pm, 13 Mar 2021

Xiaomi Corp, the world’s third-largest smartphone vendor, will step up efforts to clear its name after a US court suspended a Department of Defence (DOD) ban on American investments in the Chinese company.

The US District Court for the District of Columbia on Friday ruled against the DOD’s enforcement of the ban, which prohibits US investors from owning shares in Xiaomi because of its alleged ties with the Chinese military.

“Xiaomi believes that the decision of designating it as a ‘Chinese Communist Military Company’ is arbitrary and capricious, and the judge agrees with it,” a spokeswoman for Xiaomi said in a statement on Saturday. “Xiaomi plans to continue to request that the court declare the designation unlawful, and permanently remove the designation.”

The company sued the defence and treasury departments of the US in January, seeking to undo the former Trump administration’s ban under an executive order that restricts Americans from buying the firm’s securities and requires divestment of such holdings. The order was set to take effect next week.