(Yicai Global) Feb. 1 -- Xiaomi is taking the US government to court over a ruling made last month that added China’s top smartphone seller to a no-buy list by US investors over alleged connections to the Chinese military.

Beijing-based Xiaomi is asking a federal district court in the District of Columbia to overturn a decision made by the US’ Department of Defense and Department of Treasury on Jan. 14 to include it in a roll of so-called ‘Communist Chinese military companies,’ Xiaomi said yesterday. The move is “factually incorrect and has deprived Xiaomi of legal due process,” it said.

Former President Trump signed an executive order last November banning US investment in Chinese firms purported to have military links.

Since the Department of Defense announcement, Xiaomi’s stock price [HKG:1810] has tanked almost 10 percent. Shares were trading up 1.37 percent at HKD29.60 (USD3.82) apiece at 2 p.m. China time today.

Xiaomi shifted 43.3 million smartphones in the fourth quarter last year, making it the best selling Chinese phone maker and the third worldwide, according to US market research firm International Data Corporation. The company has taken full advantage of a different set of US sanctions against competitor Huawei Technologies that have severely hampered the tech giant’s global supply chain.

Editor: Kim Taylor