Chinese investors paid offshore companies $700 million to buy Motor Sich without the permission of the Anti-Monopoly Committee, head of the ruling Servant of the People Party, David Arakhamia, told Ukraina 24 media outlet on April 15.

The investors only came to the committee one year after acquiring the strategic Ukrainian aircraft engine manufacturer, which is unlawful, Arakhamia said. The Ukrainian government froze the deal in 2017 and said in March that the company would be nationalized and the investors compensated. 

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“They ought to have asked permission before buying,” Arakhamia said.

Chinese company Skyrizon Aircraft Holdings has been trying to buy a majority stake in Motor Sich since before 2017. After the purchase was uncovered, the Security Service of Ukraine investigated it as attempted sabotage and a conspiracy to destroy the strategic enterprise by transferring its advanced technology abroad. 

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The U.S. shares this concern and has repeatedly asked Ukraine not to let China possess the company and its tech. The U.S. has blacklisted Skyrizon, saying that it threatens U.S. interests and has significant ties to the Chinese military. 

Motor Sich’s ownership structure is complex. The company passed into private hands in the 90s when Vyacheslav Bohuslayev, a former lawmaker, bought up its shares. It is now owned by a number of offshore companies in Cyprus, Panama, and Belize. The Chinese investors tried to buy the Motor Sich from these entities. 

When the plan failed, the Chinese investors filed a $3.5 billion international arbitration claim against Ukraine in December 2020. 

Earlier this year, President Volodymyr Zelensky imposed three-year sanctions against Skyrizon owner Wang Jing, the company itself, and its parent entity, Beijing Xinwei Technology Group in an effort to stop Motor Sich’s sale. 

Wang called Ukraine’s recent actions a “continued abuse of state power and the suppression of normal business activity that violates the law and contradicts the basic principles of a market economy.”

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In his April 15 comments, Arakhamia responded, saying “By no means do we intend to violate the interests of the Chinese investors if they are legitimate investors.” 

According to the lawmaker, the owners of the companies that wanted to acquire shares in Motor Sich are now being accused of large-scale embezzlement by the Chinese authorities. 

Arakhamia said that the conflict with the criminal investigation must be resolved and this will take time. 

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