Ukraine Security Service Probes Motor Sich Shareholders’ Meeting

(Bloomberg) -- The Ukrainian state security service is investigating Motor Sich PJSC’s shareholders’ meeting, scheduled for Sunday, after the government imposed sanctions against Chinese investors seeking to purchase a stake in the defense contractor.

The security service is carrying out the probe in the southern city of Zaporizhzhya, where the company is based, “to document possible illegal actions by representatives of DCH and Skyrizon Aircraft Holdings Limited to get control over Motor Sich,” according to statement on its website.

The government in Kyiv barred four Chinese companies including Beijing Skyrizon Aviation, which had sought to buy a stake in engine maker Motor Sich in partnership with Ukrainian businessman Oleksandr Yaroslavskyy, from trade and economic activities in Ukraine. The move came after the U.S. Department of Commerce on Jan. 14 added Skyrizon to a list of companies classified as prohibited military end-users, saying its activities threaten U.S. national security.

DCH, owned by Yaroslavskyy, said Sunday in a separate statement that “it deeply examined the situation” before joining Chinese investors and concluded that they were “conscientious buyers.”

“Thus we were surprised by the Ukrainian government decision to impose sanctions,” it said. “All further actions of DCH will be carried out taking into account our interest in the development of the Ukrainian aircraft industry and only within the legal field.”

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