Xiaomi initiated legal action against two US government departments seeking to overturn a ban on local investors owning shares in the Chinese device maker.

In a filing with the Hong Kong stock exchange, Xiaomi said a decision by the US defence and treasury departments to include it as a “Communist Chinese military company was factually incorrect” and “deprived the company of legal due process”.

Xiaomi explained it acted to protect its interests by asking a US district court to declare the decision illegal and reverse it.

The US requires investors to divest their holdings in companies deemed to have links with the Chinese military: Huawei, all three major Chinese operators and Semiconductor Manufacturing International Corp are among the businesses already listed.

IDC data showed Xiaomi ranked third in global smartphone shipments in Q4 2020, shipping 43.3 million units.