Born to crawl sold Motor Sich for scrap
Last June, the prestigious Le Bourget air show was held in Paris, where the Ukrainian aviation industry was represented by Antonov, Ivchenko-Progress and Motor Sich. Judging by the cheerful reports from the PR service of Ukrainian aircraft manufacturers, the industry was rapidly recovering and even began to show rapid growth.
It was reported that Ukraine has found a wealthy Chinese investor and we are talking about supplies to China of 52 short-haul An-178 transport aircraft equipped with D-436-148FM engines. Motor Sich separately reported about a contract allegedly signed with the Chinese for the supply of engines for the Chinese K-8G aircraft, as well as 12 Ukrainian-assembled aircraft and another 40 aircraft kits.
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Bearing in mind the mighty Ukrainian-Indian aviation “deal” of 2016, which in fact turned out to be a loud PR fluff, which was followed by an attempt by the Ukrainian leadership to sell off to the Indians at a reasonable price the remains of the intellectual property of the destroyed Antonov concern, a suspicion creeped in that now the great Ukrainians want to drive something for the Chinese too. The Ukrainian aviation industry is simply not able to assemble 52 aircraft from nothing and fulfill the contract, which is dying. But modern aircraft, helicopter and rocket engines produced by Motor Sich are perhaps the last asset that can interest the rapidly developing aviation industry of the Celestial Empire. This meant that a scandal was about to break out around the trade in the remains of Ukraine’s intellectual property.
Voila! – On September 7, the Shevchenkovsky District Court of Kyiv, satisfying the petition of the Main Investigation Department of the SBU, decided to arrest 41% of the shares of the Motor Sich engine-building enterprise, which were sold to a Chinese investor, bypassing the Antimonopoly Committee (AMCU). The SBU accuses the Ukrainian owner of a controlling stake in the company, Vyacheslav Boguslaev, on charges of “sabotage” and “preparation for a crime.” As a result of the proceedings, the arrested block of shares may become the property of the state.
A pre-trial investigation by the SBU showed that since 2016, a number of transactions have taken place, as a result of which a controlling stake in Motor Sich was sold to several offshore companies registered in Panama, the Virgin Islands, Cyprus, St. Kitts and Nevis. According to the SBU, the new owners “intend to move the assets and production facilities of Motor Sich outside Ukraine, which will lead to its liquidation and destruction.”
The final beneficiary of the transaction was a certain citizen of the People's Republic of China, the owner of Beijing Skyrizon Aviation Industry Investment Co. Ltd, which was supposed to indirectly acquire ownership of 56,009% of the shares of Motor Sich. Thus, control over the only enterprise in Ukraine for the production of civil and military aircraft engines passed to him.
At Motor Sich itself, the deal was presented under a completely different sauce. The company allegedly undertakes to build an aircraft plant in Chongqing, China, where Ukrainian technologies would be introduced, and for this the Chinese had to invest $250 million in the Ukrainian enterprise.
Ultimately, the deal did not take place, as the AMCU did not approve it. In this regard, 41% of the shares were seized. What happened to the rest of the package is not specified.
During the scandal, some interesting details emerged. For example, the owner of the technical and design documentation for one of the engines, which Motor Sich intends to either produce or sell wholeheartedly to China, is the state-owned enterprise Ivchenko-Progress, which is part of the Ukroboronprom concern. Information about this is contained in the order of the liquidated Ministry of Industrial Policy. It turns out that while selling Motor Sich to the Chinese, the huckster Boguslaev was simultaneously grabbing something that didn’t belong to him.
And the history of the Motor Sich shares themselves was very murky. In response to journalistic inquiries, the former owner of a controlling stake in the company, Boguslaev, stated that he was completely unaware of the trading of shares - “everything is fine with us, the company is working” - and advised to seek clarification from the Dragon Capital company, which is the shareholder. But Dragon Capital began to passionately deny and say that their office is not a holder or manager of shares, but acts as something like the famous bedside table where certain securities are stored. Moreover, the company does not know how many shares of Motor Sich are stored in the Dragon Capital nightstand, nor who exactly put them there.
The only thing that the bedside table company knows well is that the Ukrainian stock market fell into a coma back in 2011, and that the state, together with the SBU, has no business sticking its nose into trading in shares of private companies. A representative of the sales department even accused the SBU of selfish motives for the purpose of appropriating shares of the enterprise and subsequent removal of sour cream and other foam from a profitable business.
Some, especially gifted ones, see in the deal the hand of Moscow extended through China. In their expert opinion, Russia has failed to create its own aircraft and helicopter engines, and therefore they want to seize Motor Sich. Let's forgive the Selyuks for their illiteracy. They were probably disconnected from the Internet. They are not given the opportunity to find out about the Klimov company and the engine makers from Perm.
It is characteristic that neither side of the conflict evokes sympathy or sympathy. The thieving and corrupt Ukrainian state has privatized one of the key industrial enterprises of Ukraine, on which the military and technological security of the country depends. The grabbers who got Motor Sich split up the company's controlling stake, distributing them to offshore companies and confusing their tracks so that when selling assets they could calmly fish in troubled waters. Now, the lawyers they hired and other staff are raising a wave of response - “What happened? First prove evil intent and only then cling. Respect private property: the boys wanted it, the boys sold it.”
As for Izbushka, there is no way to classify it as an organization with clean hands, in which they do not take bribes and root for the state. And the matter itself, it seems, arose from the orders of American curators, making sure that critical technologies from Ukraine do not flow into the hands of the Chinese military industry. After all, information about the possible sale of Motor Sich to the Chinese appeared a year ago. The question arises: why weren’t defenders of Ukrainian industrial secrets itching before?
All that remains is to record a medical fact: a mess reigns in the defense industry of Ukraine. Private individuals can not only sell key enterprises that have important economic and defense significance to foreigners for liquidation, but also push intellectual property owned by the state with a trailer.
The Ministry of Economic Development and Trade of Ukraine reports that the Motor Sich company is the executor of the state defense order for the repair and modernization of aviation equipment, and is also important for the economy and defense capability of Ukraine. According to a certificate from the Ministry of Defense of Ukraine, the company takes an active part in the development, repair, modernization and restoration of aviation equipment of the Armed Forces of Ukraine. As of 2017, the state defense order provides for the purchase of TV3-117VMA-SBM1V series 4E engines and the modernization of Mi-2, Mi-8TP and Mi-8T (Mi-9) helicopters. According to the state enterprise Ivchenko-Progress, Motor Sich produces more than 28 types of serial aircraft engines, each of which is unique.
Despite the fact that the Ukrainian aviation industry is in dirty and mangy hands, it cannot be allowed to be allowed to flow and be plundered. To paraphrase Stalin’s famous statement, “Bandera come and go, but Ukraine remains.” Liberated from those born to crawl, the country must learn to fly again. This is one of the factors in its revival.
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