Ukraine's state security service (SBU) is investigating a shareholder meeting of Motor Sich, the maker of jet engines for the defense industry, after the government imposed sanctions against Chinese investors seeking to purchase a stake in the company.
Law enforcement raided Motor Sich on January 31 in the southern industrial city of Zaporizhzhya, where the board meeting was scheduled and where the company’s massive production plant is based.
Ukraine on January 29 slapped sanctions on four Chinese companies seeking to buy a controlling stake in Motor Sich after the United States added one of them -- Beijing Skyrizon Aviation -- to its own sanctions list two weeks earlier.
The United States has been pressuring Kyiv to block the sale of the defense company to companies in China, which Washington sees as its primary global competitor.
Vyacheslav Bohuslayev, the 82-year-old owner of Motor Sich has backed the Chinese investors saying his company desperately needs new capital to modernize and stay competitive.
However, some officials in Ukraine and the United States worry the investors will steal the company’s technology, hurting the Ukrainian company in the long term.
Defense and aviation firms in the United States have looked at Motor Sich, but none have officially announced an interest in buying a stake in the company to counter the Chinese offer.