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Sany Group struggles for legal rights in US

Updated: 2013-05-30 11:23


Huawei, ZTE and SANY group, three leading Chinese firms in their fields. What do they have in common? They are part of China Inc that's facing hurdles overseas for so called security concerns.

Sany group is China's largest machinery manufacturer. In March 2012, The company's US subsidiary Ralls Corp bought four wind farms in the state of Oregon.

But four months later, the US Committee on Foreign Investment, the CFIUS, demanded Ralls Corp stop construction on the wind farms. The concern is that the plants are near a US naval facility where top secret drones are tested. After talks broke down, the company filed lawsuits against the institution on Sept 12.

Two weeks later, President Barack Obama issued a presidential order to shut down the wind farms due to "potential threats to US national security". It was the first time since 1990 that the US President of the United States has blocked a business deal on such grounds.

In response, Ralls Corp decided to put Barack Obama in the defendant's seat with the CFIUS in October. Sany estimates the withdrawal causes the company $20 million in direct investment losses alone.

Sany group President Xiang Wenbo, also says this is a fight for the company's dignity.

He said, "What's ridiculous is that many different companies from countries around the world have operations in that same wind field. Why do they believe only Chinese businesses pose threats to national security? We will pursue this case under the American legal procedure, and let the world see if this country's legal system really works."

Analysts say the chances of Sany winning the lawsuit are slim, but it is still an important case -- being the first lawsuit of a foreign company against the US president and the CFIUS on their home soil.

Sany Group struggles for legal rights in US