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0:06 AM Sunday, November 18, 2018
Industry
China Wants Motor Sich Takeover "Resolved" Quickly
When a partially state-owned Chinese company attempted to buy a majority ownership stake in the Ukrainian aerospace company Motor Sich, the courts here blocked the move, freezing the Chinese shares and ordering the SBU to investigate.
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By Jack Laurenson

KYIV - On April 23, masked agents from Ukraine’s Security Service (SBU) raided the offices of aerospace company Motor Sich in Zaporizhzhia as part of a criminal investigation into the company’s bosses.

After jumping over the compound’s gates, SBU agents clashed with security guards.

An SBU spokesman said the raid was part of a probe into “preparations for sabotage”, claiming a planned takeover by a Chinese company represented an “enemy plot”.

Motor Sich issued statements describing the raid and searches as illegal.

Ukrainian authorities insisted their concerns about Beijing Skyrizon Aviation’s multimillion dollar move on Motor Sich were justified.

The company is considered strategically vital to Ukraine as it is one of the world’s largest manufacturers of turbine engines and engine parts for civilian and military aircraft.

The courts claim a Chinese takeover could cause severe damage to the country’s defence industry and intervened in Skyrizon’s attempt in September 2017 to buy a controlling stake.

Some observers described it as an overreaction, while others praised authorities for protecting a vital state industry.

Skyrizon tried to acquire the controlling stake by buying US$100 million worth of shares. It said it planned to invest a further US$250 million in Ukrainian factories and move additional manufacturing to China.

Court documents show Skyrizon used a subsidiary company in the British Virgin Islands to acquire a 56 per cent stake in Motor Sich.

Under the initial agreement between Motor Sich and Skyrizon, some Ukrainian engineers would move to the south-western Chinese province of Chongqinq to help assemble state-of-the-art engines for planes and helicopters.

But Ukraine’s highest courts have indefinitely delayed the plan by freezing the Chinese shares and authorising a criminal investigation.

This article is shared from the South China Morning Post. Continue reading the story here.

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