Sany to sue US President

By Chen Yang Source:Global Times Published: 2012-10-19 0:50:04


Executives from a Chinese heavy industry giant said Thursday that they were confident they would win a lawsuit filed against US President Barack Obama for blocking its wind farm projects, though lawyers were more reserved about their prospects.

"We were forced to be high profile as Obama's executive order to cease the project has not only led to direct losses to Sany but also had a damaging effect on the company's reputation," Xiang Wenbo, board director of the Sany Group, said at a media briefing in Beijing.

On September 28, Obama ordered Ralls Corp, a US company owned by two Sany executives, to divest its interests in wind farm projects near a naval training facility in Oregon, citing national security concerns. The order was the first time in 22 years that a US president has blocked a foreign business deal. 

Xiang said Sany just made a normal investment in the US in accordance with federal laws and did not pose any security threats. But the Committee on Foreign Investment in the United States (CFIUS) and Obama banned its investment without specifying the reasons. He also noted that there are other wind farms owned by foreign companies in that region.

Sany claims it suffered a direct loss of more than $20 million, and the company is seeking to have Obama's order overturned or get compensation.

"It is difficult to estimate our indirect losses, including profits that will be generated from the projects," Wu Jialiang, CEO of Ralls and deputy general manager of Sany, told the Global Times on the sidelines of the briefing.

But he declined to disclose the exact compensation value Sany is asking for if it wins the lawsuit.

"We have confidence in winning the lawsuit as we trust the US justice system," Xiang said. The case is expected to be heard in court on November 28.

But lawyers are playing down their expectations of the lawsuit's result.

"It's difficult to win the case, because it is the first time for CFIUS to be sued by a company it censored, and the court has no previous cases as a reference," Xia Tingkang, an attorney representing Ralls, told the briefing.

"But there is still a possibility of winning the case," he said. "The US president is not above the law, and neither are national security issues."

Sany is not the only Chinese company facing investment hurdles in the US.

On October 8, the US House of Representatives Intelligence Committee said in a report that Chinese telecom companies Huawei and ZTE pose a security threat to the US. The two companies dismissed the committee's allegations as "unfair" and "impeding competition."

"Chinese companies with competitive advantages in the US can easily become targets, and there is a widespread sentiment of distrust against Chinese companies, whether they are State-owned or private ones, in the US," Niu Xinchun, a scholar at the China Institutes of Contemporary International Relations, said Thursday.

"Obama's move goes against his pledge to attract foreign investment and will hurt Chinese entrepreneurs' enthusiasm to invest in the US," said Mei Xinyu, a researcher with China's Ministry of Commerce (MOFCOM).

Experts also called for Chinese government intervention to pressure the Obama administration.

"The Chinese government can hit back by initiating national security investigations into large US companies such as Apple Inc and Cisco Systems," said Zhang Guoqing, a research fellow of the Institute of American Studies under the Chinese Academy of Social Sciences.

"In this way, these US companies will actively lobby the US congress, which could help relieve tensions between the two largest economies," Zhang said.

MOFCOM is expected to respond to the issue at a regular media briefing Friday, Huang Minghai, director of the ministry's press office, told the Global Times without elaborating.

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