 |
| Xiaomi is taking legal action against the Pentagon |
Xiaomi, the world's third largest smartphone supplier, filed a lawsuit against the Pentagon and the US Treasury in Washington District Court on Friday.
The Chinese smart device maker is trying to remove it from the official list of companies affiliated with the Chinese military.
The US Department of Defense, led by the Trump administration, added Xiaomi and eight other companies to the list in mid-January, forcing American investors to withdraw their investments in these companies within a certain period of time.
The company referred the complaint to Biden Secretary of Defense Lloyd Austin and Treasury Secretary Janet Yellen.
Xiaomi described the decision as illegal and unconstitutional because it deprived Xiaomi of its freedom and property rights and did not follow due process.
She said: The company is not under the control of the Chinese People's Liberation Army and the investment restrictions took effect on March 15, 2020, causing direct and irreparable damage to Xiaomi.
The technology company said it is not owned by the Chinese government, the Chinese military, or any unit in the Chinese defense industry.
The company clarified that 75% of the company's voting rights belong to co-founders (Lin Bin) and (Li Jun) Lei Jun, and that there is no ownership or control of any person or entity associated with the military.
He added that a large number of its shareholders are Americans while American investors are Xiaomi's third largest shareholder.
The complaint against the Pentagon and the US Treasury indicated that the company's strategic relationship with US financial institutions is critical (which is crucial for Xiaomi as Xiaomi must continue to raise the funds it needs to compete in the competitive market to expand further).
In addition, the public contact between Xiaomi and the Chinese military has a great influence on the company's position with business partners and consumers, which results in damage to the reputation that is difficult to identify or fix.
Unlike Huawei, the leader in the 5G network in China, Xiaomi focuses only on consumer goods like smartphones and smart home appliances.