Motor Sich

Motor Sich PJSC is one of the world's largest manufacturers of engines for aviation equipment, as well as industrial gas turbine installations. For 2020, it supplies products to more than 100 countries of the world. The headquarters of the corporation is located in the Ukrainian city of Zaporozhye.

Performance indicators

The company in January-September 2020 received UAH 930.2 million in net profit, while for the same period in 2019 the net loss was UAH 532.7 million. Motor Sich's net income grew by 20.2% to UAH 7 billion 679.5 million.

History

2022

Ukrainian authorities nationalize Motor Sich

In November 2022, it became known that the Ukrainian authorities would nationalize Ukrnafta, Ukrtatnafta and Motor Sich, the media.

Strategically important enterprises that are associated with Konstantin Zhevago, Igor Kolomoisky, Vyacheslav Boguslaev and Konstantin Grigorishin will become the property of the state.

On November 6, the NKTSBFR decided to ensure the forced alienation of shares of Ukrnafta PJSC, Ukrtatnafta PJSC, Motor Sich JSC, PJSC AvtoKrAZ"" and PJSC Zaporozhtransformer"." Thus, the regulator allowed the write-off of shares of these enterprises from the accounts of individuals, to the ownership of the state.

Chinese investors Motor Sich, after the nationalization of assets, opposed the abuse of state power and the "shameless behavior" of Ukraine.

Arrest of the head of the enterprise Boguslaev on suspicion of treason

In October 2022, employees of the Security Service of Ukraine (SBU) detained the president of the Ukrainian enterprise Motor Sich, the hero of Ukraine Vyacheslav Boguslaev, as well as the head of the department of foreign economic activity of this enterprise on suspicion of working for Russia, according to the SBU telegram channel.

Both are suspected under two articles of the Criminal Code of Ukraine - Art. 111-1 (collaboration activities) and Art. 111-2 (aiding the aggressor state).

The criminal case is related to the "illegal supply of military goods for Russian assault aviation by Motor Sich," the SBU explained.

According to investigators, the plant management was involved in the deliveries, which "acted in collusion" with representatives of the Russian corporation Rostec. According to the agency, the suspects have established transnational channels for the supply of Ukrainian aircraft engines to Russia. They were used for the production and repair of Russian attack helicopters: Mi-8AMTSh-VN Sapsan, Ka-52 Alligator and Mi-28N Night Hunter, the SBU said.

According to the SBU, the organizers of the scheme used controlled commercial structures in three countries of the Middle East, Europe and East Asia to bypass sanctions. These companies sent the order to the Ukrainian manufacturer "allegedly for the needs of the foreign side," and then transported military products to Russia.

The day before, Vladimir Rogov, a member of the council of the administration of the part of the Zaporizhzhya region occupied by Russian forces, announced the detention of Boguslaev on charges of high treason. According to him, Boguslaev's houses were searched, he was taken under escort to Kyiv. The Motor Sich president faces life in prison.

Russian cruise missile strikes on plant workshops

On May 24, 2022, high-precision long-range air and sea-based missiles of the Russian Armed Forces in the city of Zaporozhye destroyed the production workshops of the Motor Sich plant, which produced aircraft engines for combat aviation of the Ukrainian air forces, including unmanned aerial vehicles. The decision to strike was made during the ongoing special operation of Russia in Ukraine.

As a result, auxiliary workshops were damaged. The main workshops and production were not affected.

2021: The court arrested and transferred all real estate and shares of Motor Sich to the management of ARMA. About 75% of the company's shares were owned by Chinese investors

In March 2021, the shareholders of Motor Sich JSC began to receive a ruling of the Shevchenkovsky District Court of Kyiv dated March 19 on the arrest of all real estate of the JSC and all 100% of its shares and their transfer to the management of the National Agency of Ukraine on the identification, search and management of assets received from corruption and other crimes (ARMA).

According to a copy of such a decision available to the Interfax-Ukraine agency, the list of real estate takes 18 pages, and the shareholders, indicating their custodians, accounts and the number of shares on them, take about 125 pages.

In total, we are talking about 2 million 77.99 thousand shares with a nominal value of 135 UAH each. Among the major shareholders, in particular, Twinstar Holdings S.A. (Belize) - 129.5 thousand and Lycatron Enterprises Limited (Cyprus) - 207.592 thousand, whose securities accounts with OTP Bank.

The accounts of the keeper of Dragon Capital include Granum Corporation - 192,665 thousand, Business House Helena AG 359,727 thousand, Enfields Trade & Capital Corp. (all three are Panama) - 64,733 thousand, Trading House Elena LLC - 193.22 thousand, Motor Intercoms - 201,565 thousand and Skyrizon Aircraft Holdings Limited (Virgin Islands) - 207,783 thousand

Relatively large stakes belong, in particular, to GOBART LLC - 42.205 thousand, Coam investments Ltd (Cyprus) - 25.565 thousand units, Trabernus Corp (Panama) - 16.425 thousand shares.

The arrest of all 100% of the shares was preceded by the arrest in September 2017 of 41,00087% of the shares. According to the text in the Unified State Register of Court Decisions, the arrest, in particular, was imposed on shares of Skyrizon Aircraft Holdings Limited, Business House Helena, AG, Enfields Trade & Capital Corp, Granum Corporation and Waldo Trade Ltd - 192.665 thousand shares (9.27%).

Three and a half years later, this investigation is still ongoing. NSDC Secretary Alexei Danilov, following a meeting on March 11, 2021, said that Motor Sich would be returned to the Ukrainian people. "It will be returned to the ownership of the Ukrainian state in a legal, constitutional way in the near future," he said.

Then the SBU on March 20 reported that the Shevchenkovsky District Court of Kyiv seized the integral property complex and 100% of Motor Sich shares and decided to transfer the property to the ARMA administration for subsequent transfer to the state manager. In such a role, the state concern Ukroboronprom immediately offered itself.

The SBU clarified that it is conducting pre-trial investigations into Motor Sichi in two directions. The first - according to the signs of crimes provided for by Art. 14, 15, 111 and 113 of the Criminal Code of Ukraine (regarding sabotage and subversive activities in favor of the Russian Federation). The second - according to the signs of crimes provided for by Art. 209, 212 and 364 of the Criminal Code of Ukraine. It examines violations of the law in the initial privatization and subsequent illegal concentration of shares.

Chinese Foreign Ministry spokesman Zhao Lijian, in turn, said that China requires Ukraine to protect the legitimate interests of Chinese investors in connection with the decision to nationalize the Motor Sich enterprise, more than 50% of which belongs to Chinese companies.

According to a source in the Ukrainian government, at that time about 75% of the shares of Motor Sichi already belong to a group of Chinese owners, and some part of the controversial stake is a pledge for financing provided, among other things, to China Development Bank^[1].

2020: Chinese shareholders initiate $3.6 billion arbitration against Ukraine

Chinese shareholders of Motor Sichi initiated arbitration against states Ukraine $3.6 billion in December 2020. They argue that the Ukrainian authorities expropriated their investments, as well as violated their other rights provided for by the intergovernmental agreement on the promotion and mutual protection of investments between Ukraine and China of October 1992. The interests of the Chinese plaintiffs are represented by the international law companies WilmerHale, DLA Piper and Bird & Bird.

2018: Trading in company shares terminated as part of case initiated by SBU

Trading in Motor Sich shares was terminated on April 23, 2018 in connection with their arrest by a court decision initiated by the Security Service of Ukraine. Shortly before that, in March 2018, the Deposit Guarantee Fund of individuals managed to sell two blocks of shares worth 0.23% of the authorized capital at a price of first UAH 6 thousand, and then UAH 6.5 thousand per share.

The SBU investigation into the legality of the sale of a controlling stake in Motor Sichi was opened in September 2017.

2014: Reports of a possible withdrawal of production to Russia

On June 18, 2014, it became known that the President of Ukraine Petro Poroshenko banned military-technical cooperation with Russia. The ban did not affect dual-use products, which can be used for both military and civilian purposes.

Before the annexation of Crimea to Russia in 2014, Motor Sich was the main supplier of engines for all types of Russian helicopters, as well as An cargo and passenger aircraft.

On August 11, 2014, it became known that Motor Sich Corporation could move its assembly production to Russia or to a third country. This was reported by RIA Novosti with reference to the deputy director of the Federal Service for Military-Technical Cooperation (FSVTS) Konstantin Biryulin.

According to Biryulin, the general director of Motor Sich Vyacheslav Boguslaev is a smart person who tries in every possible way not to leave the Russian market. "He intends to transfer assembly production to Russia or a third country," said the deputy director of the FSVTS. Biryulin believes that such a measure could give the corporation the opportunity to preserve the Russian market for its helicopter engines.

On August 11, 2014, Deputy Minister of Industry and Trade of the Russian Federation Yuri Slyusar said that Russia would need two years to replace Ukrainian components in industry. "Let's hope that with the help of both our design bureaus and our colleagues from Belarus, Kazakhstan and China, we will fulfill this task," ITAR-TASS quoted Slyusar as saying.

2012: Production and maintenance of 55 types of engines operated in 106 countries

Ukrainian joint-stock company "Motor Sich" - for 2012, one of the largest in the world and the only enterprise in Ukraine for the production, testing, maintenance and repair of 55 types and modifications of economical and reliable engines for 61 types of aircraft and helicopters of various purposes, operated in 106 countries of the world.

The company produces aircraft engines and gas turbine plants, which are competitive in the world market. The company's products are operated on airplanes and helicopters of various purposes, in more than 120 countries of the world.

2011: Contract with Helicopters of Russia for $1.5 billion

In November 2011, the company signed a Russian helicopters five-year contract with OJSC "" for one and a half billion. dollars Under the terms of the contract, Motor Sich must annually supply Russia up to 270 engines for Ka-31, Ka-32, Mi-17, Mi-8 MTV, Mi-24, Mi-28 helicopters.

1907: Foundation of the Enterprise

The history of the enterprise began in 1907.

Notes