Xiaomi stock (HKG:1810) is expected to surge on Monday following the victory in the lawsuit against financial restrictions.
In the last days of the administration of former President Donald Trump, the Ministry of Defense placed Xiaomi on the list of companies with alleged ties to the Chinese military, triggering financial restrictions that were due to take effect next week.
However, U.S. District Judge Rudolph Contreras suspended the ban on Friday, acknowledging the views of Xiaomi, who claims the move is “arbitrary and capricious” and that the company has been disqualified.
“Xiaomi is a company that manufactures products for civilian use and is controlled by an independent council and by shareholders and is not effectively controlled or associated with entities under the control of the Government of the People’s Republic of China or its security services” , indicated the judge in his opinion.
In that way, a federal judge in Washington stopped the intentions of the Ministry of Defense to limit American investments in smartphone manufacturer Xiaomi Corp., Bloomberg writes.
Following the announcement of the ban, the smartphone maker was faced with the possibility of being removed from U.S. stock markets and deleted from global benchmarks.
Contreras said Xiaomi is likely to get a complete lifting of the ban in the continuation of the dispute, to prevent irreparable damage to the company.
Xiaomi said in a statement that it would insist that the court declare marking their affiliation with the military illegal and permanently remove the mark, he said.