The Security Service of Ukraine (SBU) has issued a statement alleging that the Snizhne Engineering Factory, owned by Ukrainian aerospace giant Motor Sich, has financed Russia-backed militants occupying parts of the country’s eastern Donbas region.
On July 19, the SBU announced it had opened a probe against Motor Sich and that the factory’s director and chief financial officer had received notices of suspicion on charges of financing terrorism.
The factory is located in Snizhne, a city of 50,000 people located 700 kilometers east of Kyiv and is currently occupied by Russia-backed insurgents.
According to the SBU, the factory continued to work under occupation and was paying taxes to the Russia-backed occupants in Donetsk, a regional capital of 950,000 just 50 miles further east from Snizhne. Donetsk has been occupied by Russian-led forces since 2014.
According to the SBU, in 2015, the Snizhne Engineering Factory paid 32 million rubles ($650,000) in taxes to the occupation authorities.
“The plant also provided its commodities for free to the so-called Donetsk People’s Republic, which were later used to finance the insurgents,” wrote the SBU’s press-service, referring to the unrecognized “state” that currently controls parts of Donetsk Oblast.
Contacted by the Kyiv Post, Motor Sich’s press service said that the company does not yet have an official response.
In 2018, Vyacheslav Bohuslaiev, Motor Sich’s president and a lawmaker from the 17-member People’s Will faction, told Radio Free Europe/Radio Liberty that the Snizhne Engineering Factory is still owned by Motor Sich, but was leased to a foreign company. He didn’t specify the name of the company or the company’s country of registration.
This isn’t the first time Motor Sich has faced accusations of illegal activity, nor is it the first time it has attracted the attention of the SBU or the courts.
On July 9, Bihus.info, an investigative journalism site, accused Motor Sich and Boguslaev of selling military equipment to Russia and Russian-occupied Crimea.
Bihus.Info reported that aircraft parts produced by Motor Sich were sold to Russian state-owned companies through Russian shell companies owned by Bohuslaiev and former top-managers of Motor Sich.
Four companies – Borysfen, VK MS, VKMS and Aviaremont-MS – are registered in Russia and owned by Motor Sich and Bohuslaiev. Motor Sich allegedly repaired and sold aircraft parts to Russian state-owned enterprises, including those based in Crimea, through these companies.
Bohuslaiev, who has been an outspoken supporter of maintaining close ties with Russia, did not publicly comment on Bihus.info’s allegations. The Kyiv Post could not reach him for comment despite multiple attempts.
Even before this year, the SBU and journalists had accused Motor Sich and Bohuslaiev himself of illegal activity.
In 2018, the SBU accused Motor Sich of fraud and searched the company’s headquarters. Bohuslaiev called the searches a government-sponsored raider attack on Motor Sich.
Also in 2018, the SBU opened a probe into the alleged sale of a controlling stake in Motor Sich’s stock to Chinese investors with close ties to the country’s ruling communist party through a shell company registered in the British Virgin Islands.
Critics of the deal warned that it could undermine both the security of Ukraine, and its NATO allies.
Read More: Chinese to acquire stake in Ukraine’s Motor Sich, sign helicopter deal with Russia
Motor Sich is considered one of the world’s largest and most important manufacturers of aircraft and helicopter engines and engine parts.
According to the Novoye Vremya magazine, Bogoslaev’s net worth doubled in 2018, making him the 18th richest person in Ukraine with a net worth of $301 million. He is currently running for a seat in parliament as an independent candidate in a single-member district based in Zaporizhia, a city of 750,000 people roughly 500 kilometers southeast of Kyiv. The election will be held on July 21.
The headquarters of Motor Sich and the company’s main plants are located in Zaporizhia, where Boguslaev does not face strong competition.
Boguslaev’s main competitor from the pro-presidential Servant of the People party is not well-known. Meanwhile, in the neighboring single-member district, Servant of the People has supported Hennady Kasay, the director of a sporting venue owned by Motor Sich.
In early July, Dmytro Razumkov, the head of Servant of the People, visited Motor Sich and praised Boguslaev for his service to the country.
Boguslaev was awarded the title of Hero of Ukraine back in 2000.
