The ruling, made by Shevchenko District Court, Kyiv City, on March 20, 2021, has transferred the frozen shares and property for management to the National Agency of Ukraine for the Search, Detection, and Management of Assets Obtained through Corruption and other Criminal Activities.
The court ruling is part of a pre-trial investigation being conducted by the SBU.
Read more: Ukraine's NSDC OK’s Nationalization of Motor-Sich. Investors will be Compensated
The investigation follows two lines – one under Articles 111 and 113 and the other under Articles 209, 212, 233, and 364 of Ukraine’s Criminal Code, according to a press statement released by the SBU.
The SBU says that the first of the two is investigating charges of high treason and subversive activities serving the interests of the Russian Federation, however without specifying the kinds of activities being investigated. It’s appropriate to note in that context that reports have been emerging since 2016 of Motor Sich collaborating with Russia’s defense contractors and Ministry of Defense, specifically in the field of repair and maintenance of engines on the An-124 “Ruslan” transports in Russian military service, as well as indirect supplies of aircraft engines and components to Russia.
The other deals with charges of criminal property laundering, tax evasion, unlawful privatization of state property, as well as abuse of authority and office. It is stated that the investigation involves suspected violations of law related to first-time privatization and subsequent illicit concentration of Motor Sich stocks.
The statement underlines that “this doesn’t pose any risk to Motor Sich’s production capacities; all jobs will be retained and running orders executed to completion”.
““This is not only about the fate of one individual enterprise, but about how the state is able to secure its national interests. After all, the preservation of the Ukrainian Motor Sich is a matter of national security,” the statement quotes Ivan Bakanov, the head of the SBU, as saying.
DE note: Motor Sich and Beijing Skyrizon Aviation agreed in 2016 to set up production of aircraft engines at a factory in Chungking, China. The Chinese investor had, by 2016, got ownership of 76 percent of Motor Sich shares that it had bought from Vyacheslav Bohuslayev, multi-year CEO and majority owner of the company.
The Ukrainian government has barred four Chinese companies, including Beijing Skyrizon Aviation in partnership with Ukrainian businessman Oleksandr Yaroslavsky from trade and economic activities in Ukraine. This move came after the U.S. Department of Commerce, on Jan 14, 2021, added Skyrizon to its list of companies classified as prohibited end-users, saying its activities threaten U.S. national security.
In late 2020, Skyrison and Yaroslavsky filed a $3.5 billion lawsuit against Ukraine.
Ukraine’s National Security and Defense Council, at its session held on March 11, 2021, took a decision to bring Motor Sich into state ownership.
Read more: Ukraine’s Motor Sich awarded $800 million contract to support Chinese JL-10 trainer fleet
