DCH reports prosecutors place additional arrest on Motor Sich shares

Ukrainian prosecutors imposed an additional arrest on
Motor Sich (MSICH UK) shares and are suspecting “state treason” in the attempt
of DCH and Chinese Skyrison to ask the Antimonopoly Committee for permission to
take control of the aeronautics company, DCH Group owner Oleksandr Yaroslavsky
said on Aug. 7, as reported DCH press service. He also said that pressure is
being placed on the antimonopoly officials to hinder “the legal shareholders of
the enterprise to dispose of their property.” He expressed his hope that
“thanks to the political will” of Ukraine’s president, who recently revealed his intention to assess the situation with
Motor Sich, “a state decision will be made to
save Motor Sich.”

Recall, DCH reported last week that it filed a joint request (together
with Chinese Skyrison) with Ukraine’s Antimonopoly Committee for a permit to
take control of Motor Sich on Aug. 4. Skyrison, which reportedly bought a
controlling stake in Motor Sich in 2016-2017, has been prevented by Ukraine’s
officials from taking control of the company. Motor Sich shares have been
frozen since 2017, while its shareholders have been banned from holding a
shareholder meeting since then, which has resulted in preserving a de jure
control over the company by the entourage of its president and former
controlling shareholder Vyacheslav Boguslayev. The sale of Motor Sich’s
controlling stake has also alarmed U.S. officials, who are seeking to prevent
Chinese firms from taking control over “military and sensitive technologies”
allegedly possessed by Motor Sich.

Alexander Paraschiy: Yaroslavsky
has become very active in lobbying the interests of himself and his Chinese
partners in Motor Sich. This, as well as President Zelensky’s attention to the
situation, could result in a soon resolution of the deadlock involving
ownership and control over the company. This gives a chance for positive
changes in the company, or at least more clarity about its future. As we
highlighted before, the current situation with Motor Sich’s corporate
governance is very risky for the company’s future.