Chinese investors in Motor Sich, a Zaporizhia-based major aircraft engine manufacturer, are threatening new lawsuits in response to last week’s sudden announcement of the company’s possible nationalization.
Wang Jing, owner of the Chinese company Skyrizon Aircraft Holdings, released a public statement on March 6 denouncing Ukrainian authorities and pledging to “resolutely protect and safeguard the legitimate rights of Chinese investors.”
“We have already filed and are preparing to file a number of additional lawsuits in Ukraine, in China, and at the international level,” Wang stated.
Skyrizon has been trying to buy a majority stake in the strategic Ukrainian company but has been thwarted by the Security Service’s and the Anti-Monopoly Committee’s freeze of the shares in question. The Chinese investors filed a $3.5 billion international arbitration claim against Ukraine in December.
This controversy is the latest in a more than four-year standoff with Chinese investors seeking to acquire Motor Sich amid fierce opposition from the United States.
In an unexpected move on March 3, David Arakhamia, the leader of the 248-seat ruling Servant of the People Party, said that Ukraine’s Parliament would soon introduce a bill to nationalize the aerospace company.
The following day, on March 4, president of Motor Sich Vyacheslav Bohuslayev, accused the Chinese partners of refusing to invest, claiming in a speech that “there are no Chinese investors and no investment program.”
According to Bohuslayev, Chinese investors should have paid $250 million as part of an agreement for the acquisition of shares in 2018, but “not a penny has been seen.”
Wang called Bohuslayev’s statements “deliberately false”. He warned that any speeches or actions that harm Chinese investors will be used as evidence or the subject of legal proceedings and referred to the appropriate judicial and law enforcement agencies.
Earlier this year, Ukrainain President Volodymyr Zelensky announced new three-year sanctions against Wang, Skyrizon and its parent company, Beijing Xinwei Technology Group in an effort to stop Motor Sich’s sale.
Wang called Ukraine’s recent actions a “continued abuse of state power and the suppression of normal business activity that violates the law and contradicts the basic principles of a market economy.”
According to Wang, these actions will only serve to help Chinese investors win its international arbitration case and recoup all investments and losses “for which the state of Ukraine will be disgraced in front of the whole world community.”
Motor Sich has access to patents for advanced helicopter engines, which China hopes to acquire.
The U.S. strongly opposes the sale, wary of China’s military buildup in the South China Sea. China also has multiple joint defense projects with Russia, leading to concerns that these engines may end up being used by Russia against Ukraine.
The U.S. recently introduced sanctions against Skyrizon, accusing it of trying to “acquire and indigenize foreign military technologies” and referred to it as a “state-owned company.”
