News: Blacklisted Chinese firms eye lawsuits after Xiaomi win against Trump ban.
(Reuters) – Chinese companies hit by former President Donald Trump’s sweeping investment ban are considering suing the U.S. government after a federal judge suspended a similar blacklist for Beijing-based smartphone maker Xiaomi on Friday.
Lawyers familiar with the matter said some of the banned Chinese companies are in talks with law firms such as Steptoe & Johnson and Hogan Lovells, encouraged by U.S. District Judge Rudolph Contreras’ preliminary order to stop Xiaomi’s inclusion on a U.S. list of alleged Communist Chinese military companies are subject to an investment ban.
The Trump administration’s move to the blacklisting of Xiaomi Corp, which reduced its market share by $ 10 billion and cut its shares by 9.5 percent in January, would have forced investors to sell all of their stakes in the company.
“Companies are reaching out to lawyers to question the listings and why they were listed,” said Wendy Wysong, managing partner of the Hong Kong office of Steptoe & Johnson, a Washington-based global law firm. Wysong and a person familiar with Hogan Lovells, another global law firm, declined to name the companies involved in discussions.
Contreras pointed to the US government’s “deeply flawed” process of including the company in the investment ban, which was based on just two main criteria: the development of 5G technology and artificial intelligence, which the Department of Defense considers “essential to modern military operations “Denotes an award given to Xiaomi’s founder and CEO, Lei Jun, from an organization designed to help the Chinese government remove barriers between the commercial and military sectors.
The judge found that 5G and AI technologies were quickly becoming the standard in consumer electronics and that since 2004, over 500 entrepreneurs had received the same award as Lei, including directors of a baby food company.
“The facts that led to Xiaomi’s appointment are almost ridiculous, and I think it will absolutely lead other companies to seek relief,” said Washington attorney Brian Egan, a former legal adviser to both the White House and the State Department who also works at Steptoe.
UNKNOWN GOVERNMENT ON THE WAY FORWARD
In a joint filing on Tuesday, the government said it had failed to decide the “reasonable way forward” in the Xiaomi case given the judge’s decision.
A spokeswoman for the US Department of Justice defending the case declined to comment. A Defense Department spokeswoman referred questions to the White House, which has not responded.
Xiaomi and 43 other companies were blacklisted here in the last few months of the Trump administration, mandated by a 1999 law requiring the Department of Defense to publish a compilation of companies “owned or controlled by the Chinese military.” ” become.
Trying to cement a hard line against China and including his Democratic successor Joe Biden in hardline politics, Trump signed an executive order that was later expanded to prevent all US investors from selling securities in as of November 11, 2021 to keep the named company.
Other publicly traded companies include video surveillance giant Hikvision, China National Offshore Oil Corp. (CNOOC) and China’s leading chip maker Semiconductor Manufacturing International Corp.
SMIC, Hikvision and CNOOC did not immediately respond to requests for comment.
Luokung Technology Corp, a card technology company on the list, also sued the U.S. government earlier this month and is expected to request preliminary reliefs similar to Xiaomi’s.
Reporting by Karen Freifeld and Alexandra Alper; Additional coverage from Mike Stone; Editing by Peter Cooney
Original Source © Reuters