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Up for sale? Chinese find way to swallow Motor Sich

Author
Evgeny Chernovalov

The Chinese corporation Beijing Skyrizon Aviation Industry may cede a 25% stake in Zaporozhia-based Motor Sich to the Ukraine’s state-run Ukroboronprom concern. That’s what is needed to cinch the takeover of the Motor Sich plant, which Ukraine’s SBU State Security Service blocked two years ago.

The Kyiv-based Liga.net news agency has reported the news, citing numerous sources.

The Chinese company will give Ukraine its share for free, according to Ukroboronprom. To this end, a cooperation agreement has already been signed. The parties also concluded another deal — on joint management of the plant.

But companies will be able to execute agreements only after approval by Ukraine’s Antimonopoly Committee. The agency is currently considering a joint statement.

Context:

  • Two years ago, the SBU accused Member of Parliament Vyacheslav Bohuslaev of selling a 56% stake in Motor Sich to Chinese investors affiliated Beijing Skyrizon Aviation Industry Investment.
  • In July 2017, the SBU opened criminal proceedings for "sabotage" "preparation for a crime." Kyiv’s Shevchenkivsky District Court in September of that year seized shares of Motor Sich.
  • Security officials believe that the purchase of a controlling stake may be related to the transfer of production to China. Bohuslaev considers the sale of shares to be legal and regards the searches conducted by the SBU as "part of the raider attack" on the enterprise.
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