BEIJING (Reuters) - A Chinese firm that has sued U.S. President Barack Obama for blocking its wind farm project pledged to fight “to the very end” the security-related order, saying it was placing its faith in the U.S. justice system.
Obama’s order for Ralls Corp to divest its interests in the projects, near a military facility, marked the first time since 1990 that a U.S. president has formally blocked a business transaction on security grounds, and comes amid heightened tensions between the United States and China over trade actions by the U.S. administration.
Ralls, which is owned by two executives of China’s Sany Group, was installing wind turbines made by Sany close to a naval training site in Oregon which, according to the facility’s web site, is used to test unmanned drones - a highly sensitive and prized U.S. technology.
The lawsuit is viewed as a long shot given the president’s broad authority on national security matters and the fact that courts do not often second guess the executive branch on security issues.
But Ralls Chief Executive Wu Jialiang, one of the Sany executives who owns the company, said he was determined to press ahead.
“We are full of confidence that we will win this lawsuit because we are innocent. We believe in justice and the equality the U.S. legal system represents,” Wu told a news conference in Beijing.
“We will fight till the very end,” he said, adding that the U.S. action was partly motivated by politicians seeking to score points ahead of the U.S. presidential election and that it could cost thousands of U.S. jobs.
Ralls has also incurred investment losses of more than $20 million as a result of the action, he said.
Ralls argues that Obama exceeded his power by dictating the terms of the sale, allowing the government to inspect all aspects of its operations and not treating the company equally as required under the law.
Sources close to Ralls have also said there are other wind farms owned by foreign competitors in the area.
But experts say Ralls greatly underestimated U.S. suspicions about Chinese intentions.
In addition to the wind farm dispute, a U.S. congressional committee has urged U.S. companies to stop doing business with two Chinese telecom equipment makers, Huawei Technologies Co Ltd and ZTE Corp, over security concerns.
Tim Xia, an attorney representing Ralls, acknowledged that the case will be tough.
“It is really difficult to win the case. However, I believe that in a society governed by the rules of law, nobody can be above the Constitution of the United States, not even the president even in the name of national security,” he told the news conference.
Sany Group is the parent company of Shanghai-listed Sany Heavy Industry Co, China’s largest construction equipment maker. The group is owned by Chairman Liang Wengen, who is China’s fifth richest man, according to the latest ranking by the Hurun Report.
Obama’s order followed a recommendation from the Committee on Foreign Investment in the United States, an inter-agency group headed up by the Treasury secretary that evaluates the national security risks of foreign investments in U.S. companies or operations. Ralls is also suing the committee.
Writing by Kazunori Takada; Editing by Edwina Gibbs