A Ukrainian court has rejected an appeal filed by China-based Skyrizon Aircraft Holdings to unfreeze the shares of aircraft engine manufacturer Motor Sich.

This ruling by the Kiev court has come as a major setback for Skyrizon Aircraft Holdings, which has sought to acquire Motor Sich in a transaction that was opposed by the US, which is the biggest military aid donor to Ukraine.

Although the Chinese firm acquired a majority stake in Motor Sich, the shares were frozen in 2017 following a probe by Ukraine’s security service SBU.

Since Ukraine’s relations with Russia soured after Moscow annexed Crimea peninsula in 2014, both the US and China have been competing to gain influence in Ukraine, reported Reuters.

Covid-19 Report — Updated twice a week Understanding the Covid-19 outbreak, the economic impact and implications for specific sectors

Covid-19 executive briefing report cover
GlobalData

Our parent business intelligence company

The Kiev court froze the shares over the pending SBU investigation into whether the selling of shares of Motor Sich will impact its national security as it could allow sensitive technology into the hands of foreign company.

Dated 13 March, the ruling was shared with the parties last week.

Skyrizon intends to launch further appeals, reported Reuters.

Will we see a V, U or L shaped recovery for civil aviation?

Loading ... Loading ...

Motor Sich cut its association with its biggest customer Russia following the latter’s annexation of Crimea.

It is reported that the firm is now operating at less than 50% capacity.

Former Prime Minister Anatoliy Kinakh told Reuters that ‘Motor Sich has become a hostage to the geopolitical situation’ and has urged for a quick resolution to the issue.

The state’s anti-monopoly panel has begun its probe and is waiting to secure more documents to decide whether the sale can be approved.