Popular mobile brand Xiaomi has sued the US government for designating it as a military company of the Chinese Communist Party. Xiaomi says that the designation is unconstitutional and baseless.

Department of Defense designated Xiaomi as a military company which means US individuals and organizations are forbidden to buy shares. 

If the decision is not overturned Xiaomi won't be able to American capital and the investors could be forced to sell their stakes.

The company might also concern about its access to the key US-based technologies which could be crucial for its growth.

The lawsuit filed in DC court says that the prohibitions are unconstitutional and the allegations are baseless and false. It also says that the designation “deprives Xiaomi of its liberty and property rights without due process of law.”

“[Xiaomi] believes that the decision to include the Company as a “Communist Chinese Military Company” under the NDAA by the Department of Defense and the Department of the Treasury of the United States (the “Decision”) was factually incorrect and has deprived the Company of legal due process,” Xiaomi said in a statement.