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Ukraine Probes Motor Sich Defense Firm For 'Subversion'

An engine made by Motor Sich at an international weapons exhibition in Kyiv on October 2017.
An engine made by Motor Sich at an international weapons exhibition in Kyiv on October 2017.

The Ukrainian Security Service (SBU) is investigating defense firm Motor Sich for allegedly preparing a “subversive act” by supplying military hardware to Russia, the agency has told RFE/RL.

Motor Sich -- a maker of engines for jets, missiles, and helicopters -- has as recently as July denied law enforcement allegations and local media reports suggesting it supplies Russia with military equipment or parts that could be used for both civilian and military purposes.

The export of military or dual-use equipment to Russia, which occupies Crimea and is accused of providing military assistance to armed separatists controlling swaths of eastern Ukraine, is illegal.

Responding to the RFE/RL inquiry, the SBU called Motor Sich a company that has “important economic and defense value.”

No further details were provided.

Because of the armed conflict with Russian-backed separatists, the SBU is investigating the alleged provision of hardware as a “subversive act against Ukraine.”

Moscow has denied leading, fighting beside, training, or supplying separatists who took control of parts of eastern Ukraine in 2014 and are still fighting a simmering conflict along a so-called Line of Contact. It initially denied invading the Crimean Peninsula before annexing that Ukrainian territory in March 2014.

The SBU in April 2018 thwarted a possible sale of Motor Sich to a Chinese firm by raiding the defense company's headquarters and seizing its shares.

At the time, the company was valued at nearly $500 million.

Last year, the SBU said that “foreigners” have a majority of Motor Sich’s shares kept in six offshore companies and in the hands of one individual.

However, the same Chinese company, Beijing Skyrizon Aviation, earlier this summer renewed its effort to gain a controlling stake in Motor Sich.

Ukraine’s antitrust agency, the Anti-Monopoly Committee, told RFE/RL on August 30 that it is reviewing the issue.

The Wall Street Journal reported on August 23 that the United States has been trying to prevent the sale of Motor Sich to the Chinese, which is technologically less advanced in the manufacture of the type of engines the Ukrainian firm makes.

Four days later, U.S. national-security adviser John Bolton visited Kyiv when he was asked about the possible Chinese acquisition.

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."

A week ago, U.S. President Donald Trump delayed the transfer of $250 million worth of military aid to Ukraine.

Motor Sich employs more than 20,000 people in the southwestern Ukrainian city of Zaporizhzhya.

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