Nasdaq withdraws listing ban on Luokung after U.S. judge's decision (updated)

Luokung Technology

06/05/2021 19:43

(Adds status of Xiaomi case)
    By Karen Freifeld
    WASHINGTON, May 6 (Reuters) - Nasdaq Inc  NDAQ.O  has
withdrawn a decision to delist the shares of Luokung Technology
Corp  LKCO.O , the Chinese mapping technology company said on
Thursday, after a U.S. judge suspended an imminent investment
ban imposed under the former Trump administration.
    The ruling and listing news sent shares of the company
nearly 20% higher. Luokung, in a news release on Thursday, said
Nasdaq had notified the company that it has withdrawn its
delisting letter and shares would continue to trade on the
market, and would not be suspended on May 7. A Nasdaq spokesman
declined to comment.
    A spokesperson for the U.S. Department of Justice did not
immediately respond to a request for comment.
    Luokung is the second company on a U.S. list of alleged
Communist Chinese military companies subject to an investment
ban to win a preliminary injunction halting the designation.    
    U.S. District Court Judge Rudolph Contreras in Washington
issued a similar order in March in favor of Beijing-based
smartphone maker Xiaomi Corp  1810.HK .
    In granting an injunction in the case brought by Luokung's
challenge of the ban, Contreras said the Department of Defense's
designation process was flawed.
    “Many of the associations the Department of Defense seemed
most troubled by - such as Luokung’s purported forays into space
systems or its potential future contracts with the Chinese
National Geospatial Information Center ... do not appear to have
materialized, nor are they likely to bear fruit before this case
can be decided on the merits,” Contreras wrote in his decision. 
    He added the government has not identified a single
technology transfer from Luokung to the People's Republic of
China. 
    In the Xiaomi case, the U.S. acting solicitor general
decided that the government would not appeal the preliminary
injunction, according to an April 27 filing. Given that
decision, the U.S. said it was still deciding the path forward
and whether the case could be resolved. A new status report is
due May 11.
    More than 40 companies were added to a U.S. Department of
Defense list of alleged Chinese military-controlled companies 
in the waning days of the Trump administration, making them
subject to an executive order barring Americans from buying
securities in such companies.
    

 (Reporting by Karen Freifeld in New York
Editing by Matthew Lewis and Leslie Adler)
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