Motor Sich’s would-be investors from China are acting as though they already own the company.
But President Volodymyr Zelensky said they have another thing coming.
On Jan. 29, the president’s office and the National Security and Defense Council announced new three-year sanctions against Wang Jing, the head of Skyrizon and its parent company, Beijing Xinwei Technology Group.
Skyrizon, with the help of Kharkiv tycoon Oleksandr Yaroslavsky, are trying to unfreeze the sale of Motor Sich, a major manufacturer of aircraft engines.
The president’s sanctions signal that Ukraine wants to continue to oppose the sale of Motor Sich, which should please the U.S. but anger China. The sanctions block Wang Jing’s and Skyrizon’s assets in Ukraine, ban the movement of capital out of Ukraine and prohibit buying or selling Motor Sich securities to the sanctioned parties.
Nevertheless, Yaroslavsky and the Chinese on Jan. 19 announced a competition for 11 management positions at Motor Sich. They also plan to hold an extraordinary “shareholder meeting” on Jan. 31.
“Stakeholders that own more than 80% of the shares of Motor Sich have agreed to participate in the general shareholder meeting,” according to an open letter attributed to Skyrizon and Wang Jing, posted online.
The letter slams Motor Sich’s management for not recognizing the Chinese investors as the company’s lawful owners and claims that this will seriously undermine the company’s future.
Motor Sich’s supervisory board issued a statement that the Jan 31. meeting is illegal and the company will take every step to defend its rights.
The Chinese investors tried to buy a majority stake in Motor Sich in 2016. Ukraine’s security services froze the company’s shares in 2017 after the U.S. and Japan got wind of the deal.
If China acquires Motor Sich, it will get Ukraine’s advanced helicopter technology, which it will use to try to dominate the South China Sea region. Some of that technology may also end up in the hands of Russia, with which China has joint defense projects.
In December, Skyrizon and Yaroslavsky’s DCH Group launched a $3.5 billion international arbitration case against Ukraine, accusing it of unlawfully arresting the Chinese investors’ shares.
Defense analysts believe this was an attempt to pressure Ukraine into unfreezing the sale. This put Ukraine into an uncomfortable tug of war between China, its biggest trading partner and the U.S., its biggest ally against Russia.
On Jan. 15, the U.S. placed Skyrizon on its own blacklist, which bans U.S. companies from doing business with it without a special license.
U.S. Commerce Secretary Wilbur Ross stated that Skyrizon, “a Chinese state-owned company and its push to acquire and indigenize foreign military technologies pose a significant threat to U.S. national security and foreign policy interests.”
People familiar with U.S. talks with Ukraine about the Motor Sich situation have previously told the Kyiv Post that the U.S. remains actively committed to keep the advanced engine technology from falling into China’s hands.
