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Ukraine's Zelenskiy Says Potential U.S. Buyer For Aeronautics Firm Motor Sich News To Him

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Ukrainian President Volodymyr Zelenskiy

KHARKIV, Ukraine -- Ukrainian President Volodymyr Zelenskiy first heard of reported U.S. interest in buying the country’s only and one of the world’s top makers of engines for military cargo aircraft and helicopters by reading the news.

While at a meeting with the state-run defense conglomerate Ukroboronprom in Kharkiv on November 6, Zelenskiy told RFE/RL that he learned of the alleged interest in buying Motor Sich the previous day.

He made the comments after The Wall Street Journal reported that Erik Prince -- a private defense contractor whose company is registered in Beijing and Hong Kong, and an informal adviser to U.S. President Donald Trump -- had been in talks to acquire Motor Sich.

"I also read about this and only last night," Zelenskiy said. "I haven't met with anybody, I haven't spoken about this with anyone, but this issue should be tied to the president of Ukraine because Motor Sich is a strategic enterprise, therefore I can't add anything else to this."

Previously a founder of the defense contractor formerly known as Blackwater, Prince reportedly had been to Ukraine nine times since 2014 and visited the advanced aircraft-engine maker's headquarters in Zaporizhzhya.

Citing U.S. officials briefed on the matter, The Wall Street Journal reported on November 5 that the Trump administration had allegedly approached Prince and at least one other potential buyer to acquire the company, which possesses sensitive technologies.

However, a controlling stake of the company's shares remains frozen by a Ukrainian court order. The stake mostly belongs to obscure Chinese companies called Skyrizon Aircraft and Xinwei Telecoms, both of which are ultimately majority-owned by businessman Wang Jing.

The Skyrizon-Motor Sich relationship started in 2015 and by 2017, when Chinese share ownership in the Ukrainian firm was frozen, production lines were being installed at the Chinese company's base at the Chongqing industrial park with Ukrainian specialists.

Both companies even had a joint booth in October 2017 at the Beijing aviation-engine expo. A slide at the show said the two companies had "joined hands to establish a national-level aero engine industrial base where the Chinese and Ukrainian technologies, manufacturing resources, and top talents are gathered, shared, and implemented," the Financial Times reported on October 5, 2017.

The news raised concerns in Ukraine and abroad that crucial technology was being transferred and that Motor Sich was not going to be used for manufacturing.

The facility by then was capable of testing, repairing, and maintaining imported engines, but not manufacturing them, the Financial Times reported.

A Ukrainian court ruling at the time cited a clause in the Criminal Code about sabotage of strategic assets that are fundamental to national security interests when freezing the shares.

As a privately owned company, Motor Sich CEO Vyacheslav Bohuslayev had initially sold a bulk of his shares to the Chinese that sent off red flags to the authorities, including the Ukrainian Security Service and the antitrust agency.

Technology transfer to China and Motor Sich's future ownership was reportedly the main focal point of former U.S. national-security adviser John Bolton's visit to Ukraine in August.

During his visit, Bolton said he did not want to discuss specific companies and that such deals were a sovereign matter for Ukraine, according to Reuters.

But he made clear the U.S. administration disapproved of the transaction, telling reporters: "We laid out our concerns about...unfair Chinese trade practices, threats to national security we've seen in the United States."

With reporting by The Wall Street Journal, Kyiv Post, Financial Times, and Bloomberg
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