(Reuters) – Chinese companies targeting radical investment ban imposed by former President Donald Trump are considering suing the US government after a federal judge suspended a similar blacklist for the smartphone maker on Friday based in Beijing, Xiaomi.
Lawyers familiar with the matter said some of the banned Chinese companies are in talks with law firms, including Steptoe & Johnson and Hogan Lovells, encouraged by the preliminary order of U.S. District Judge Rudolph Contreras who arrested the Xiaomi’s inclusion in a U.S. list of alleged Chinese communist military companies that are subject to an investment ban.
The Trump administration’s blacklisting of Xiaomi Corp., which withdrew its $ 10 billion market share and reduced its shares by 9.5 percent in January, would have forced investors to completely disintegrate. their holdings in the company.
“Companies are contacting attorneys to challenge the listings and the reasons for the listings,” said Wendy Wysong, managing partner of the Hong Kong office of Steptoe & Johnson, a global law firm based in Washington. Wysong and a person familiar with Hogan Lovells, another global law firm, refused to name the companies involved in discussions.
Contreras pointed to the “deeply flawed” process by the U.S. government to include the company in the investment ban, based on only two key criteria: its development of 5G technology and artificial intelligence, which the Department Defense Minister claims they are “essential to modern military operations,” and an award was given to Xiaomi founder and CEO Lei Jun of an organization that said it would help the Chinese government remove barriers between trade sectors and military.
The judge noted that 5G and AI technologies were rapidly becoming the standard in consumer electronics and that more than 500 business owners had received the same award as Lei since 2004, including the leaders of a children’s formula company.
“The facts that led to Xiaomi’s appointment are almost ridiculous, and I think it will absolutely lead to additional companies seeking relief,” said Washington attorney Brian Egan, a former legal adviser to both the White House and the United States. State Department that also works at Pas de peu.
THE GOVERNMENT IS NOT DECIDED ON THE WAY FORWARD
In a joint filing on Tuesday, the government said it had not decided the “appropriate way forward” in the Xiaomi case in light of the judge’s decision.
A U.S. Justice Department spokeswoman, who defends the case, declined to comment. A Defense Department spokeswoman referred questions to the White House, which she did not answer.
Xiaomi and 43 other companies were added here during the Trump administration’s waning months to the blacklist, which was required by a 1999 law that required the Department of Defense to publish a collection of “owned or controlled” companies by the Chinese army.
With the goal of consolidating a hard line against China and leading his Democratic successor, Joe Biden, in hard-line policies, Trump signed an executive order that was later expanded to prevent all U.S. investors from having securities. to designated companies as of November 11, 2021.
Other companies listed include video surveillance giant Hikvision, China National Offshore Oil Corp. (CNOOC) and China’s largest chip maker, Semiconductor Manufacturing International Corp.
SMIC, Hikvision and CNOOC did not immediately respond to requests for comment.
Luokung Technology Corp., a listed mapping technology company, also sued the U.S. government earlier this month and is expected to seek preliminary relief similar to that granted to Xiaomi.
Reports by Karen Freifeld and Alexandra Alper; Additional reports by Mike Stone; Edited by Peter Cooney