SBU initiates criminal proceedings over the sale of Ukraine’s Motor Sich to Chinese investors
On 6 July 2017, the Security Service of Ukraine (SBU) initiated criminal proceedings according to the article on “preparation for sabotage” in connection with the sale of the Motor Sich factory to Chinese investors affiliated with the company Beijing Skyrizon Aviation Industry Investment Co. Ltd, Liga.net reports with a reference to the ruling of the Shevchenkivsky District Court from September 7.
“The pretrial investigation has established that from 2016 to the present, unidentified persons from among the incumbent and former officials and ultimate beneficial owners of Motor Sich... in order to weaken the state by destroying the said enterprise as an object of important national economic and defensive significance (the only company in Ukraine which produces commercial and military aircraft engines), have carried out a number of transactions to sell the controlling stake in the company to the foreign companies Business House Helena, AG (Panama), Enfields Trade & Capital Corp. (Panama), Waldo Trade Ltd. (Virgin Islands), Granum Corporation (Panama), Skyrizon Aircraft Holdings Limited (Virgin Islands), Likatron Enterprises Limited (Cyprus), Ventalina Management Ltd (Nevis), which intend to move the company’s assets and production capacity outside Ukraine, which will lead to its liquidation and destruction,” the report states.
According to the report, on 6 April 2016 Motor Sich received $100 million from Skyrizon Aircraft Holdings Limited (British Virgin Islands) at 0.3% per annum as part of a loan agreement from 29 January 2016 with the Chinese company Beijing Skyrizon Aviation Industry Investment Co. Ltd.
Beijing Skyrizon Aviation Industry Investment owns 100% of the registered capital of the company Hong Kong Skyrizon Holdings Limited (Hong Kong), which in turn owns 100% of the registered capital of the company Skyrizon Aircraft Holdings Limited.
Later, a Ukrainian citizen whose name is not mentioned in the report sold 56% of the Motor Sich shares over the course of 2016 to authorized representatives of the owner of Beijing Skyrizon. According to the court ruling, the Ukrainian citizen who allegedly sold the Motor Sich shares previously owned 15.83% of the company’s shares directly. He also owned 17.3% of the shares through Business House Helena and 15.7% through Garant Invest, Garant Alpha, Business House Helena, Motor Garant, and other companies.
Earlier Ukrainian MP Vyacheslav Boguslaev, honorary president of Motor Sich, declared that in 2016 his ownership share of Motor Sich decreased from 15.8% to 1%.
At the SBU’s request, the Shevchenkivsky District Court arrested the Motor Sich shares which are held in the accounts of Dragon Capital and belong to Skyrizon Aircraft Holdings Ltd, Business House Helena, Enfields & Capital Corp, Waldo Trade Ltd. and Granum Corporation.
When commenting to the press, Boguslayev neither confirmed nor denied the information on the sale of the shares. “I am a Ukrainian citizen. The exchange in Kyiv for buying and selling shares is operational. I follow it every day. That’s why I can’t give a comment. There is the organization Dragon Capital. It can say something, because they are the holders of the shares. I have no idea where or how they bought them. We have everything in order, the factory is operational,” Boguslayev noted. Dragon Capital owner Tomas Fiala could neither confirm nor deny the information on the deal.