Motor Sich can make money in China, and then the Ukrainian government will not have to build up debts, said Aleksandr Goncharov, the Director of the Institute for Economic Development.
The government of Denis Shmygal ‘begs for a small change’ as a credit from Western partners, although it has the opportunity to earn billions on cooperation with China. To do it, it is necessary to resolve the conflict with the Chinese investors of Motor Sich. They have invested about a billion dollars in the Ukrainian enterprise and are ready to provide the company with orders. It was stated on Facebook by Aleksandr Goncharov, the Director of the Institute for Economic Development.
It was his commentary on the request of the Ukrainian government to the European Investment Bank to provide Ukraine with 25 million Euro to help small and medium-sized enterprises. Aleksei Goncharenko, People’s Deputy from European Solidarity, wrote about plans to ask for the money in Telegram. According to Goncharov, the corresponding appeal signed by Finance Minister Sergei Marchenko was approved at a government meeting.
‘Our authorities parted brass rags in all areas of cooperation and the implementation of joint investment projects with the PRC,’ Goncharov notes. ‘It got to the point that China already intends to collect $3.5 billion from Ukraine through international arbitration because of the situation with PJSC Motor Sich (deadline is November 10, 2020).’
He recalled that China is the largest economy in the world, and it is beneficial to cooperate with it.
‘Money should be earned where there is a lot of it. However, the Ukrainian authorities constantly leave the highway to collect small mushrooms in their personal baskets and do not rush to mushroom places. You be the judge, here are the statistics on the volume of money supply in the countries of the world: 1. China – $25 trillion; 2. US – $ 14 trillion; 3. Germany – $ 3.3 trillion,’ listed the economist.
Goncharov noted that by attracting a partner in the person of Turkey to the defence industry and aircraft engine building, Ukraine again deliberately creates a potential conflict, this time with the EU.
‘Why did Ukraine have to hurry to conclude contractual relations with Turkey as a strategic partner? Is that as a snub to Germany and France? Especially in the context of the recent tragic events, especially since Berlin condemned [Turkish President Recep] Erdogan’s attacks on [French President Emmanuel] Macron,’ analyzes the economist.
He added that Ukraine could hardly regard the United States as a reliable and understandable partner as ‘everything is too confusing and vague’ there.
At the meeting, Shmygal’s Cabinet of Ministers made another decision to apply to the European Investment Bank with a request to receive a loan of 25 million Euro to help small and medium-sized enterprises in the fight against COVID-19. ‘So now it is OK to beg for a change?’ wrote the expert.
PJSC Motor Sich is one of the world’s largest manufacturers of engines for aviation equipment, as well as industrial gas turbine units. In 2016, the company was acquired by Chinese investors associated with Skyrizon and invested more than $100 million in the development of production. Subsequently, it was a question of transferring a 25% stake of Motor Sich to the state concern UkrOboronProm. However, in June of this year, Ruslan Korzh, an advisor to the General Director of Ukroboronprom, said that ‘today this proposal is no longer relevant, it lost its force last year,’ wrote LIGA.net.
Now a repeated application from the Chinese company Skyrizon and the DCH group to issue a permit for the concentration of shares PJSC in Motor Sich is under consideration by the Antimonopoly Committee of Ukraine. Businessmen from China consider the AMCU’s actions a manifestation of ‘unfriendly behaviour of the Ukrainian authorities’, which, in their opinion, is aimed at expropriating investments from Motor Sich. They wrote a letter to the Verkhovna Rada, in which they ask ‘to stop unreasonable pressure from government agencies,’ and also to help Ukraine avoid losses in the amount of $3.5 billion, which they, as investors, intend to recover as compensation in an investment dispute in international arbitration... A similar letter was sent to the Ministry of Justice.
Viacheslav Boguslaev, ex-owner of Motor Sich, was included into the delegation for the visit and negotiations in Ankara in October. He sold a controlling stake over four years ago to a group of Chinese investors.
‘He has not been a shareholder of the company for more than four years and has no powers. The retain the status of “president” and “general designer” is only due to a misunderstanding with the seizure of shares and the inability to convene a shareholders’ meeting. It means that Ukraine and its president are deliberately or unknowingly slipping Erdogan in with a “ski instructor” and a troubled enterprise with disputed property,’ wrote the president of the Ukrainian Analytical Centre, Aleksandr Okhrimenko. He believes that as a result, during a trip to Ankara the President of Ukraine Volodymyr Zelenskyi gave the President of Turkey guarantees that he would not be able to fulfil.
The Times of the Middle East wrote that the Ukrainian Deputy Prime Minister for Strategic Industries Oleg Urusky offered representatives of the Turkish side to buy a 50% stake in Motor Sich in August.
‘The scandalous detail of this offer is that the controlling stake (over 50%) of the only Ukrainian serial manufacturer of aircraft engines, Motor Sich, belongs to a group of Chinese investors. It means that the Ukrainian Deputy Prime Minister is either deliberately misleading the Turkish side, or Ukraine is looking for a way to complete the scheme of illegal expropriation of the Ukrainian asset of a group of Chinese investors, in which they have invested about a billion dollars,’ the Ukrainian news agency UNN noted.
In September 2020, Chinese investors notified the Ministry of Justice of Ukraine of the possibility of filing a claim with international arbitration courts to recover from Ukraine $3.5 billion in damages caused by blocking legitimate business transactions between private business entities of Ukraine and China, Hubs wrote.
