Hong Kong firm appeals for legal protection of investors as its Panama Ports contract faces lawsuits

Independent

a day ago

A subsidiary of a Hong Kong conglomerate entangled in U.S.- China tensions appealed on Friday for legal protection for businesses in the Central American country after the company's contract over its Panama Canal port assets has been faced with lawsuits.
Respect for the rule of law is essential to assure businesses that Panama is a safe place to invest in, Panama Ports Company, under Hong Kong-based CK Hutchison Holdings, said in a statement.
Panama's Comptroller General filed two lawsuits on Wednesday, seeking to declare unconstitutional a contract that granted the operation of ports at both ends of the canal to the Hong Kong subsidiary, and to nullify its renewal four years ago, saying it was 'abusive' of Panama's interests.
In turn, Panama Ports Company said its operations have had a positive impact, from building world-class ports to creating more than 25,000 direct and indirect jobs and contributing billions of balboas — Panama's currency — to the country's economy.
It said it wants to work with the government in Panama for a better future.
'Regarding the ongoing legal actions, we firmly believe that respect for legal protection and the rule of law are essential in order to provide businesses and investors with the certainty that Panama is a safe country to invest in,' it said.
The company operates the ports of Balboa, in the Pacific, and Cristobal, in the Atlantic, under a concession contract approved in 1997 and renewed in 2021 for 25 more years. CK Hutchison is controlled by the family of Li Ka-shing, the southern Chinese city's richest man.
Panama's comptroller authority in April said that an audit of Panama Ports Company found irregularities in the renewal of the concession. But the company denied allegations that it had failed to pay about $1.2 billion to the Central American country.
CK Hutchison Holdings' initial plan, announced in March, to sell its port assets in dozens of countries to a group that includes the U.S. investment firm BlackRock Inc., also got caught up in tensions between Beijing and Washington.
U.S. President Donald Trump, who has alleged that China interferes with the canal, initially welcomed that plan. However, it apparently angered Beijing and drew a review by Chinese anti-monopoly authorities.
After months of uncertainty, Hutchison said on Monday that it may seek a Chinese investor to join a consortium of buyers, which also includes BlackRock subsidiary Global Infrastructure Partners and Terminal Investment Limited, a subsidiary of the Mediterranean Shipping Company.
The initial deal, valued at nearly $23 billion, including $5 billion in debt, would have given the consortium control over 43 ports in 23 countries, including the two at the Panama Canal.
Panama Ports Company said Friday it would communicate with the Panamanian government 'at the appropriate time,' affirming that it believes engaging with the government 'is vital to discuss the way forward for' the company.
Panama's government maintains it has full control over the canal and that the operation of the ports by Hutchison does not mean Chinese control of it.