SBU confirms ongoing investigations of Motor Sich

The Security Service of Ukraine (SBU) has confirmed
that it is still investigating possible crimes of sabotage and treason at
Ukrainian aeronautics engine producer Motor Sich (MSICH UK), the
radiosvoboda.org news site reported on Sept. 4. The investigations involve
actions aimed at ruining Motor Sich “as an entity of major economic and defense
importance,” the SBU said. Also the SBU suspects Motor Sich in supplying
military and dual purpose hardware to Russia, which falls under the criminal
charge of “assistance in subversive actions against Ukraine.”

Recall, since September 2017, the SBU has been
investigating the sale of a controlling stake in Motor Sich to Chinese
investors, suspecting a potential crime of state sabotage in this deal.
The sale, which was confirmed in August, has drawn
criticism from U.S. National Security Adviser John Bolton, who warned against providing military technologies
to “adversaries or potential adversaries.”

Alexander Paraschiy: Now that
Motor Sich’s top beneficiary Viacheslav Boguslayev has lost political immunity against criminal prosecution,
it has become easier for law enforcement bodies to pressure him if Ukrainian
power brokers decide to halt the Chinese deal. As before, we see the SBU’s
attempts to prove an organized effort to ruin Motor Sich from within as being
not only baseless, but strange.

Moreover, we view the SBU suspicions of sabotage
(attempts to destroy Motor Sich) and conspiracy with Russia (attempts to sell
sensitive technology to Russian aviation plants) as contradicting each other.
Nevertheless, we see pressure on Motor Sich is unlikely to stop soon, meaning
that there is little chance its shares will resume trading on the local stock
exchange. It’s also increasingly likely that the company’s fundamentals will
worsen.