Ukrainian Court Seizes Aerospace Company Motor Sich From Chinese Investors

This article was originally published March 20, 2021, by Radio Free Europe/Radio Liberty. 

A Ukrainian court has seized the assets and all the shares of aerospace company Motor Sich, one of the world’s largest producers of engines for helicopters and planes.

Ukraine’s state security service SBU said in a statement on March 20 that a Kyiv court ruled to seize all property and shares of Motor Sich, and the company was transferred to a government body responsible for managing assets obtained through corruption and other crimes.

The move to seize the jet engine manufacturer is likely to irk China but please the United States, Ukraine’s chief foreign backer against Russian aggression.

In January, the United States blacklisted Chinese aviation firm Skyrizon, which has sought to acquire a controlling stake in Motor Sich, and said the firm’s “predatory investments and technology acquisitions in Ukraine represent an unacceptable risk of diversion to military end use” in China.

‘Matter Of National Security’

Two weeks later, Ukrainian President Volodymyr Zelenskiy signed a decree imposing sanctions on four Chinese companies including Skyrizon that were seeking to gain control of the aerospace firm.

“It’s not just about the fate of one company, but about how the state is able to protect its own interests. After all, the preservation of Motor Sich is a matter of national security,” SBU chairman Ivan Bakanov said in the statement.

Motor Sich has been under investigation for crimes related to benefiting Russia and violations of the law during the initial privatization and subsequent illegal concentration of shares.

Earlier this month, Ukraine’s Security and Defense Council announced plans to nationalize Motor Sich due to its strategic importance to national defense. Zelenskiy’s ruling party then told parliament this month that it would submit a bill on nationalizing Motor Sich.

In December, the Chinese investors behind Skyrizon filed a $3.5 billion arbitration case against Ukraine, accusing Kyiv of expropriating its investment in Motor Sich after the government froze its shares in the company in 2018.

Motor Sich makes engines for helicopters and aircraft. It also makes engines that can be used for cruise missiles and drones.

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