The Security Service of Ukraine (SBU) is investigating a planned meeting of investors trying to assert themselves as the owners of Motor Sich, a major manufacturer of aircraft engines, days after Ukraine imposed sanctions against the would-be shareholders.
The meeting was scheduled for Jan. 31 in the city of Zaporizhia but was disrupted by the arrival of SBU personnel, who demanded to search the premises, according to news outlets Ukrinform and Radio Free Europe/Radio Liberty. Motor Sich employees and lawmakers also arrived to protest against the meeting.
Chinese company Skyrizon Aircraft Holdings Ltd. tried to buy a majority stake in Motor Sich in 2016 but the acquisition was interrupted after Ukraine froze the company’s shares in 2017.
The Chinese investors, joined by Kharkiv businessman Oleksandr Yaroslavsky, insist that they are the company’s rightful owners. Police and the SBU are investigating whether Skyrizon and Yaroslavsky’s company DCH Group broke the law by organizing the meeting.
The SBU “is documenting the facts of preparation for the destruction of the production facilities of the company”, reads the service’s press release.
The shareholders’ meeting aimed for a “reinstatement of the Chinese investor, Skyrizon,” according to a statement by DCH, which is working with Skyrizon to try to clinch the acquisition.
Skyrizon and DCH have filed arbitration proceedings, accusing Ukraine of violating their rights as investors and claiming $3.5 billion.
The U.S. is strongly opposed to the deal, which would give China access to Motor Sich’s advanced technology.
On Jan. 14, the United States blacklisted Skyrizon as a threat to the country’s security.
“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,” stated U.S. Commerce Secretary Wilbur Ross.
Then, on Jan. 29, President Volodymyr Zelensky’s office and the National Security and Defense Council imposed three-year sanctions against Wang Jing, the head of Skyrizon and its parent company, Beijing Xinwei Technology Group.
The deal is also a threat to Ukraine. China has multiple joint defense projects with Russia, which is waging war against Ukraine in the Donbas. One is a project to build military helicopters relying on Motor Sich engines.
