Ukrainian defense conglomerate Ukroboronprom could be hit by US sanctions for selling Motor Sich to China

The US could impose sanctions on Ukraine’s state-owned defense conglomerate UkrOboronProm if the China-controlled company Skyrizon Aircraft Holdings Ltd. gains joint control over the company Motor Sich, said Yuriy Terentyev, head of the Anti-Monopoly Committee of Ukraine, in a broadcast of Radio NV.

“We could find ourselves in a completely absurd situation, if the Chinese party acquired control over this enterprise together with UkrOboronProm. The US could find confirmation that the Chinese party is in the supply chain of Russian Helicopters, and the Kafkaesque situation will arise in which UkrOboronProm ends up under the American anti-Russian sanctions through Motor Sich,” he said.

Terentyev pointed out that sanctions could be imposed on all the companies linked to UkrOboronProm’s financing, including banks. He emphasized that Ukraine must take these risks into account when considering selling Motor Sich.

Zaporizhia-based Motor Sich is one of the world’s largest producers of airplane and helicopter engines and industrial gas turbines.

In August, the Chinese companies Skyrizon and Xinwei Group submitted a deal on the purchase of a more than 50% share of Motor Sich to the Anti-Monopoly Committee of Ukraine for approval.

As part of the multi-phase deal, Skyrizon Aircraft, which currently owns a 9.99% share in Motor Sich, plans to acquire more than 50% control of the Ukrainian company’s other offshore shareholders – Granum Corporation (9.3% share), Likatron Enterprises Ltd. (9.99%) and Reckoner Investment Holdings Ltd. (9.99%).

Speaking on the same topic in August, then US National Security Advisor John Bolton said that he would visit Kyiv to meet with the leaders of Motor Sich and convince them to abandon the idea of selling the company to China. US officials largely perceive the Motor Sich arrangement as another step by China towards expanding its military potential.

China’s ambassador responded that the US has no right to “interfere brazenly” in military cooperation between Ukraine and China. On an official level, he spoke about non-interference in the “commercial deal” between Motor Sich and the Chinese companies.

  Ukroboronprom, USA, Ukraine