Chinese investors vow to protect rights after reports of Ukraine nationalizing Motor Sich
Published: Nov 10, 2022 11:52 PM Updated: Nov 09, 2022 11:20 PM
File photo

File photo

A representative for Chinese investors of Motor Sich, a Ukrainian aircraft engine manufacturer majority-owned by Chinese companies, on Wednesday vowed to take "all legal means" to firmly protect their full interests, in responding to reports of Ukraine nationalizing Motor Sich, a move that could cause serious financial losses for Chinese investors.

In a statement posted on Beijing Skyrizon Aviation Industry Investment Co's WeChat account, Wang Jing, the representative, said that since 2014, Chinese investors have legally invested in and held a majority stake in Motor Sich through normal business channels and are entitled to legal rights and protection of the law.

"Chinese investors will continue to maintain active communication with all parties in various ways, never give up the fight to protect their rights with legal weapons, and at the same time will adopt all legal means to continuously, resolutely, and unreservedly protect all of our own legitimate rights," Wang said in the statement.

Ukraine said on Monday that it had invoked wartime laws to take control of stakes in Motor Sich and four other strategic companies, placing the privately held stakes under the control of the Ukrainian Defense Ministry, Reuters reported on Monday.

In the report, Reuters noted that it was the first time the Ukrainian government had used martial law for such a move since the start of the Russia-Ukraine conflict and also the most dramatic intervention of the war into big business.

However, the Ukrainian government has not given any explanations as to how it will handle Chinese firms' investment into Motor Sich. 

Between 2017 and 2019, Chinese investors and the Ukrainian government signed a series of cooperation agreements after lengthy negotiations. The forced nationalization of Motor Sich would cause a major financial loss for Chinese investors, accordion to the statement.

Prior to the reported move this week, the Ukrainian government had repeatedly talked about nationalizing Motor Sich. In March 2021, Ukrainian authorities announced they plan to nationalize Motor Sich.

Commenting on the move on March 12, 2021, Chinese Foreign Ministry spokesperson Zhao Lijian told a regular briefing that "we urge the Ukrainian side to safeguard the legitimate rights and interests of Chinese companies and investors in accordance with law and properly handle relevant issues."

In November 2021, Chinese investors filed a lawsuit at the Hague-based Permanent Court of Arbitration, seeking billions of dollars in compensation over the Ukrainian government's plan to nationalize Motor Sich.