Tomas Fiala's impunity demonstrates that the government is only willing to pay lip service to fighting for national security and actually punishing those responsible. Published on the website Correspondent.
The hushing up of Tomas Fiala's involvement in the sale of the strategic defense enterprise Motor Sich reveals the true extent of the US's external control over Ukraine.
The National Security and Defense Council's March decision to return Motor Sich to state ownership is a unique example of double standards and the Ukrainian government's complete dependence on the US administration. It demonstrates the government's official silence and refusal to investigate the involvement of Tomas Fiala, owner of the investment company Dragon Capital, in the sale of the strategic defense enterprise Motor Sich to Chinese companies. Furthermore, when sanctions were imposed against Motor Sich's Chinese shareholders, the accomplices and direct participants in the share purchases were completely ignored.
Tomas Fiala's impunity demonstrates that the government is only willing to fight for national security and effectively punish those responsible for undermining it, while in reality, it has facilitated the emergence of a new oligarch in Ukraine, untouchable due to his ties to George Soros and the leadership of the US Democratic Party:
Back in 2017, the Shevchenkivskyi District Court of Kyiv arrested Motor Sich shares, which were listed in the accounts of Dragon Capital and belonged to a number of companies affiliated with the Chinese - Skyrizon Aircraft Holdings Limited (Virgin Islands), Business House Helena (Panama), Enfields Trade & Capital Corp (Panama), Waldo Trade Ltd (British Virgin Islands), Granum Corporation (Panama).
Initial media reports suggested that between 2016 and 2018, V. Boguslayev and related companies sold a 56% stake to the Chinese. However, the formal requirements of Ukrainian law regarding shareholding concentration were not violated, as the sales were conducted by splitting the stakes into smaller stakes of up to 10%. Dragon Capital owner Tomas Fiala played a key role in organizing this process. Although his role was formally limited to providing brokerage services, V. Boguslayev himself commented on the accusations of selling a strategic enterprise as follows: "I am a Ukrainian citizen. The Kyiv stock exchange for buying and selling shares is operational. I monitor it every day. Therefore, I cannot comment. There is an organization called Dragon Capital. They might have something to say, since they are shareholders. I have no idea where or how they bought."
According to a court decision dated March 19, 2021, Dragon Capital holds a 60,5% stake in Motor Sich. The company's share acquisitions began in 2014 and actively continued in mid-2016, when, at its peak, Dragon Capital directly owned approximately 10% of the shares. In June 2017, a 6,2% stake was sold to the offshore company Twinstar Holdings SA. The seller was the Cypriot DRGN Limited. In March 2018, the Cypriot TEXVILLE LIMITED purchased 0,47% of Motor Sich shares from insolvent banks. This company is one of the owners of Forum Slavutich LLC. TEXVILLE LIMITED is also the founder of POLIDROMOS LLC, which, according to the register, officially belongs to Tomas Fiala, and the company is registered at the Dragon Capital office. Between 2014 and 2016, companies in the Dragon Capital group purchased at least 300,000 shares (14% of the total) for at least UAH 659 million! In a June 2017 deal alone, Cyprus-based DRGN Limited earned at least UAH 53,7 million from the sale of a 6,2% stake.
In a 2019 interview with Liga.NET, Tomas Fiala himself, when asked about his involvement in the sale of Motor Sich, deliberately provided incomplete information, stating that "Dragon Capital only served as a custodian of the shares, without a mandate to purchase them... However, since 2006, Dragon Capital has been trading Motor Sich shares, which are traded on the stock market." Fiala then feigned ignorance of the complexities surrounding the sale of Ukraine's strategic defense enterprise to a group of Chinese companies amid the armed conflict in Donbas, thereby clearly being disingenuous. He also avoided answering the question of who actually owns Motor Sich shares, citing his limited knowledge of the matter.
On Savik Shuster's talk show on March 13, 2021 (after the National Security and Defense Council of Ukraine had already imposed sanctions on the Chinese shareholders of Motor Sich and announced its intention to nationalize the company), Fiala confidently stated that he was fully aware of who owned which shares in the company. Furthermore, Fiala advocated "a cautious nationalization process, as China is our largest trading partner. The funds for the acquisition of the Motor Sich shareholding were provided by the state-owned China Development Bank; the loan amount, by my estimates, was over $500 million." Fiala, following the official line of the Ukrainian government, also began to express concern about preserving jobs at the company and "ensuring that this enterprise is not destroyed."
What we see is that the man who played a key role in orchestrating the transfer of a controlling stake in Motor Sich into the hands of "private Chinese investors," who, however, "received a loan from a state-owned Chinese bank," has significantly changed his rhetoric and position regarding Motor Sich. What caused this significant revision of the Dragon Capital owner's position? The answer lies in the radical reconsideration of President Zelenskyy's personal stance and that of his administration on this issue. As early as early 2020, Fiala was building a line of fierce opposition to Zelenskyy's policies (in particular, calling for a suspension of investments in the country following his removal). Yakova Smoliya), however, already at the end of the year, he began to demonstrate his loyalty to Bankova in every possible way through his media pool and the part of the Voice faction that he controlled.
Since the beginning of 2021, Volodymyr Zelenskyy has taken more active steps to build constructive relations with the newly elected Joe Biden administration in the United States. His primary strategy has been a public confrontation with Ihor Kolomoisky and a number of opposition politicians, a move that Washington officials have repeatedly emphasized. Of course, the prospect of transferring Motor Sich technologies to China is also a matter of strategic defense importance for the United States, potentially significantly altering the strategic balance between Washington and Beijing.
• January 16, 2021 — The U.S. Department of Commerce's Bureau of Industry and Security (BIS) added Skyrizon, a Chinese company that invested in Motor Sich shares, to the Military End User (MEU) List, which includes 58 Chinese and 45 Russian companies. The U.S. government has determined that entities on the MEU list pose an unacceptable risk of use or diversion of technology for "military end uses" or "military end users" in China, Russia, or Venezuela.
• January 16, 2021 — the Chinese company Skyrizon, an investor in Motor Sich, against which the US Department of Commerce imposed sanctions due to a threat to national security, considers such actions illegal and is seeking legal instruments for protection
• January 28, 2021 — Volodymyr Zelenskyy, by his decree, put into effect the decision of the National Security and Defense Council of January 28, 2021, which provides for the application of special economic sanctions against Chinese investors in Motor Sich
• January 31, 2021 – The SBU conducted investigative actions in Zaporizhzhia at 8 Yuzhnoe Shosse Street in connection with a criminal case involving an illegal meeting of shareholders of Motor Sich JSC
• February 1, 2021 — The National Securities and Stock Market Commission of Ukraine opened a case against the depository institution Dragon Capital LLC, in whose securities accounts Motor Sich shares are placed. Dragon Capital, according to the NSSMFC, violated the rules regarding the provision of information and organizational support for the unlawful general meeting of Motor Sich, which was scheduled for January 31.
• March 11, 2021 – a closed decision of the National Security and Defense Council of Ukraine on the protection of national interests in the field of aircraft engine manufacturing, providing for the nationalization of Motor Sich
• March 24, 2021 – V. Zelensky signed a decree on the implementation of the decision of the National Security and Defense Council on the protection of national interests in the field of aircraft engine manufacturing (nationalization of Motor Sich)
• March 31, 2021 – “The United States considers Ukraine’s steps regarding the nationalization of Motor Sich and the prosecution of former PrivatBank executives to be encouraging, and also supports the imposition of sanctions against V. Medvedchuk and T. Kozak,” said K. Quinn, US Chargé d’Affaires in Ukraine, in an interview with Interfax-Ukraine.
• April 2, 2021 — J. Biden and V. Zelensky held their first official telephone conversation
• April 5, 2021 — Ukrainian Ambassador to the United States Oksana Markarova: "The National Security and Defense Council's decision on Motor Sich is in line with Ukrainian interests."
Thus, the Ukrainian government's hard line on the sale of shares in a strategic enterprise became one of the tools used to demonstrate the new administration's loyalty to Washington, and also demonstrated its willingness to bear the reputational, investment, and diplomatic costs associated with the worsening relations with China. At the same time, the National Security and Defense Council of Ukraine (NSDC) imposed harsh sanctions on a number of politicians opposed to Zelenskyy. The mechanism used was identical: a NSDC decision followed by Zelenskyy's immediate signature. The results of these decisions were widely presented in pro-government media and official government communications as the true results of a struggle for national interests, but in reality, they were intended for a Western audience.
At the same time, the obvious duality of standards and the difference between actual actions and statements in the cases of sanctions imposed on Motor Sich and those against other Ukrainian politicians and businessmen are striking. In the case of the latter, the alleged ultimate beneficiaries and culprits were clearly stated (we suspect, simply designated), the SBU initiated proceedings, and their business assets were frozen. The situation surrounding Motor Sich, on closer inspection, is fundamentally different, although it is similarly presented as a victory for the authorities (in Washington's interests):
• The SBU is not actually carrying out any investigative actions (except for disrupting the shareholders’ meeting) to investigate the circumstances of the sale of Motor Sich shares to Chinese investors in order to identify those responsible and accomplices to the crime.
• Neither the National Security and Defense Council, nor other official bodies and government officials have publicly raised the issue of the need to identify those responsible and involved in the sale of a strategic enterprise, which the state is now forced to nationalize, incurring significant costs.
• In early December 2020, Chinese investors filed an investment dispute with international arbitration seeking to recover damages from the Ukrainian state, estimated at $3,5 billion. Ukraine could potentially be forced to pay this amount, which once again underlines the importance of identifying the specific group of persons whose actions led to such consequences.
Therefore, it should be noted that the state and law enforcement agencies have no questions for at least two specifically identified individuals involved in the sale of Motor Sich shares. This primarily concerns Boguslayev and Fiala, who possess a comprehensive database of all transaction details—the origin of the funds, the logistics of splitting and transferring the shareholdings, the final identities of their counterparties, and their connections to state-owned companies in China and Russia. Unlike other decisions by the National Security and Defense Council, these individuals were not named by law enforcement agencies, they were not publicly accused of anything, and their businesses, particularly Dragon Capital, were not included on sanctions lists or law enforcement watch lists.
This situation clearly demonstrates Washington's policy of double standards and new lists of untouchables for the Zelenskyy administration. The authorities should be asked to answer a fundamental question: why is the government officially silent and unwilling to investigate the involvement of T. Fiala, owner of the investment company Dragon Capital, in the sale of the strategic defense enterprise Motor Sich to Chinese companies? Why, when imposing sanctions against Motor Sich's Chinese shareholders, are accomplices and direct participants in the share purchases completely ignored?
The anticipated responses could, in fact, be extremely unpleasant, demonstrating profound differences between the government's official rhetoric and its actual actions, between its intention to protect national security and the effective punishment of those responsible for undermining it, and revealing the true extent of the US administration's external influence in Ukraine. Several compromising points are being kept quiet:
• Tomas Fiala, involved in the sale of Motor Sich to the Chinese, is proud of his collaboration with George Soros and his stake in Dragon Capital. Soros, in turn, is a recognized supporter of the Democratic Party in the United States and individual members of it affiliated with the new US President, Joe Biden. In words, the Democratic Party is strongly opposed to Motor Sich falling into Chinese hands, but it overlooks and ignores the direct involvement of "its own" man in this process, Fiala.
• Zelenskyy's government in Ukraine considers Fiala untouchable not only because of his connections with representatives of the ruling party in the United States. Fiala has recently truly become an "oligarch 2.0", whose services are needed by the current government in the context of an intra-clan struggle for the redistribution of resources. In support of this fact, it should be mentioned that Fiala owns a powerful media pool, at the center of which is Novoye Vremya (the resource has been extremely loyal to the government lately; it is worth paying attention to the issue of the magazine with A. Yermak on the cover), as well as a number of specialized financial media. Fiala is also one of the largest real estate owners in Ukraine, with the corresponding financial weight and contacts, heads or is directly involved in a number of openly lobbying projects that can cause reputational damage to the government (the Kyiv School of Economics - its director T. Mylovanov is a freelance adviser to A. Yermak, as well as the European Business Association). Fiala is also reportedly a sponsor and beneficiary of some MPs from the "Voice" faction, which recently experienced a major split due to the rapprochement of this faction (K. Rudyk-Yu. Klymenko-Ya. Zheleznyak) with the position of the Office of the President of Ukraine.
• T. Fiala's wife, N. Fukleyeva, works for the law firm DLA Piper, which, among others, will defend Ukraine's interests in international arbitration with Chinese investors over Motor Sich. The cynicism and particular duplicity of this situation lies in the fact that the services of private lawyers will be paid for by the state from the budget…"
FILE: Tomas Fiala: Soros's Vulture Dragon Over Ukraine. Part 1
In topic: Not the last Chinese one. Why is Kyiv driving the Motor Sich situation into a dead end?
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