"Motor Sich" and Russia: what does China and Cuba have to do with it?

Relations with Russia

For "Motor Sich" , Russia has always been almost the most priority partner. It remained so after 2014. The company "Motor Sich" continued to supply bulk consignments of Ukrainian aircraft engines to the Russian Federation, but already illegally, through other countries: Cuba, Lithuania, with the help of China. The Russians used these engines for attack helicopters. In particular, the КА-52, which our anti-aircraft fighters bravely neutralized in the sky over the Kherson region.

Russian Ka-52 helicopter

Since 2009, no less than 28% of Motor Sich JSC shares belonged to Russian companies, in particular Oboronprom. And until Russia was stuck in sanctions due to the annexation of Crimea and Donbas, the Russian Federation was the main partner of "Motor Sich", in particular for the state-owned enterprise "Vertolety Rossii". At the same time, China (Avicopter) and the Russian Federation, represented by the Russian Helicopters Corporation, were developing heavy helicopter projects for China.

"Chinese" story of "Motor Sich"

In 2015, the construction of the "Motor Sich" plant in the Chinese city of Chongqing began, which was financed by the Skyrizon company and the Chinese government.

Aircraft engine assembly facility in Chongqing after completion of construction
Picture of the Chinese plant "Motor Sich"

It was planned that, in particular, part of the team of specialists would be transported from Ukraine to China’s plant. In 2018, plant workers began assembling TVZ-117VMA-SBM1B (ТВЗ-117ВМА-СБМ1В) engines. This plant in Chongqing is declared as a military industry enterprise.

Ukrainian specialists in Chongqing, 2018

It was planned to build a second plant. It was supposed to be a project of an engine plant, which was supposed to produce power plants for training and military transport aircraft, as well as helicopters of the Mi-8/Mi-17 class. The enterprise was planned to be located in Liangjiang Township, Guangxi Autonomous Province. And for its construction, dozens of Ukrainian specialists were involved, who on the spot provided the necessary assistance in the construction of a second similar enterprise according to the typical drawings of the first one. But cooperation with “Motor Sich” in this project was frozen.

The next year, companies related to Russian beneficiaries (in particular, the Rotenberg brothers) acquired 15% of the shares of Motor Sich. It is interesting that newly minted foreign shareholders of "Motor Sich" cannot come to Ukraine due to the prohibition of the Security Service of Ukraine. Therefore, they held their meetings in Switzerland, the UAE, the Baltic States, China, the Russian Federation, and other European countries. 

Curator of production is Andriy Smirnov , a representative of Nirit-Sinway Telecom Technology. This LLC was created on the initiative of China and Russia in 2012. And its shareholder is the company "Xinwei Group". And this "Xinwei" is a shareholder of Skyrizon, which owns 10% of “Motor Sich” shares.  

Therefore, LLC "NSTT" is the Russian division of Xinwei, which owns 10% of the shares of "Motor Sich"

Who is Andriy Smirnov?

Andriy Valentinovych Smirnov

Andriy Valentinovych Smirnov since 2014 president and chairman of the Board of Directors of the Russian-Chinese telecom company NSTT LLC. According to the publication "Mirror of the Week", one of the managers of this LLC is a former employee of the Russian special services. It is probably about Smirnov. From 1982 to 2009, he built a military career and a career in the Russian FSS, becoming a veteran of "Alfa". It is interesting that he began his military career at the Poltava Military School (Ukraine). 

Later, Smirnov's career ladder led to Open JSC "Transneft service", where he worked as deputy general director from 2009 to 2014. Andriy's son, Matvei, is the deputy director of business development at "NSTT" LLC.  

In 2011, the president and chairman of the board of Xinwei (Beijing Xinwei Technology Group Co. Ltd) Wang Jing visited Russia and met with the management of Nitrite JSC, Oleg Shorin, to discuss the creation of NSTT LLC. The Chinese delegation was invited by the “United Russia” party and the Ministry of Communications of the Russian Federation. 

Wang Jing, Chairman of the Board of Xinwei
Wang Jing at a meeting with the management of "Nirit", 2011
Boguslaev (left), Wang Jing (center) and Ukrainian ex-Ambassador to China Oleg Demin (right), 2015

Cuba is one of the channels of illegal supplies

Export of aircraft engines to Cuba was organized together with the leasing company "Ilyushin Finance Co" (IFK) as part supply of An-158 manufactured by DT "Antonov" in 2013-2015. As part of this agreement, the Panamanian legal entity South American Aircraft Leasing (SAAL) buys aircraft from the same "IFK", after which it leases them to the Cuban airline Cubana de Aviacion. According to Oleksandr Rubtsov, CEO of IFC, the scheme involving the Panamanian company allows IFC to recover VAT from the deal, as it direct export sale of aircraft. 

In 2007, Boguslaev and Rubtsov signed a $200m contract for the supply of 74 D-436-148 engines and 37 auxiliary power units for An-148 aircraft. At that time, they announced that the collection of engines would be transferred from Kyiv to Russian Voronezh. 

The agreement on the supply of AN between "SAAL" and "IFK" was concluded in 2012 during the air show in Farnborough, as part of the contract, "Motor Sich" was supposed to supply Panama with D-436-148 engines for 15 AN-148 and AN- 158, the first 6 for three An-158 were planned to be installed in December 2012, then 2 per month. According to the press release of "IFK", in 2013, three An-158 were delivered to Cuba. In December of the same year, "IFK" takes a loan of $50m from JSC "Promsvyazbank" to cover expenses related to advance payments from SE "Antonov" for 3 AN-158.

September 2013. "Motor Sich" and "Antonov" signed a contract with the company "Kubynska Aviation" for the modification of the Cuban AN-2 fleet with MS-14 engines. "Motor Sich" will be the supplier of engines and their components, JSC "Aerosila" – AV-17 propellers.

In 2017, according to commercial director of Cubana de Aviacion, Yoanka Acost, there were mass cancellations and delays of flights operated by An-158 aircraft. Acost stated that the reason is the technical condition of the planes, as well as the late supply of spare components due to the Russian Federation's war with Ukraine. They also discovered an increase in the operating temperature of the D-436 engines. And already in May 2018, the Cuban authorities suspended the operation of all An-158s of the Cubana de Aviacion company. Due to the lack of components, as of March 2018, remained 10 unfinished An-148 and An-158.

Amounts of contracts concluded by "Motor Sich" with Russian companies (million, $)
Russian companies with which "Motor Sich" cooperated the most (2014-2019)
After 2014, JSC "Motor Sich" expanded exports through "short-lived companies"

A few words about JSC "Motor Sich"

JSC "Motor Sich" is a large Ukrainian corporation engaged in the production of aviation gas turbine engines for airplanes and helicopters and industrial gas turbine installations. The company itself is located in Zaporizhzhia. It was founded 1907 , and in the first years of its activity, agricultural mechanisms and tools were manufactured there, cast iron and copper were cast. The company supplied aircraft engines to more than 100 countries of the world and is considered one of the most powerful companies in this field.

We will remind, on October 22, the SSU detained the president of JSC "Motor Sich" Vyacheslav Boguslaev, as well as the head of the department of foreign economic activity of the enterprise on suspicion of "collaborative activities" and "assistance to the aggressor state." As it turned out later, Boguslaev has been a citizen of the Russian Federation since 2000. 

Meanwhile, the labor collective of JSCs "Motor Sich" publishes an appeal, where they express their excitement at the detention of Boguslaev because he is "a talented manager, a person infinitely devoted to Ukraine."

Appeal of the labor team of JSCs "Motor Sich" 

So far, the Shevchenko Court of Kyiv has taken Boguslaev into custody for 2 months. We will follow the development of this story further.  

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