Panama Says CK Hutchison Owes $300 Million, Concession in Doubt
The unit, Panama Ports Co., didn't receive required approvals from the comptroller's office for a contract extension in 2021 and also used a series of tax-exempt subcontractors to lower the amount it pays to the government, Flores said. The company has also breached its agreement to share 10% of net income with Panamas government, Flores said Monday following an audit.
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Epoch Times
2 days ago
- Epoch Times
Panamanian President Backs Lawsuits That Threaten Sale of Panama Canal Ports
If successful, the lawsuits could pave the way for Panama to take over the two key ports. An aerial view shows containers at the Balboa Port, operated by Panama Ports Company, at the Panama Canal, in Panama City, Panama, on Feb. 1, 2025. An aerial view shows containers at the Balboa Port, operated by Panama Ports Company, at the Panama Canal, in Panama City, Panama, on Feb. 1, 2025. Enea Lebrun/Reuters Panamanian President José Raúl Mulino on Thursday signaled that the Central American nation may take control of two ports at either end of the Panama Canal, potentially threatening the $22.8 billion sale plans of the ports' current owner, Hong Kong-based conglomerate CK Hutchison, to a U.S.-based investment company. The announcement came after Panama's comptroller general, Anel Flores, filed two cases with the nation's highest court seeking to invalidate a contract extension with Panama Ports Company, which would then allow Panama to establish its own public-private partnerships for the two ports. Panama Ports Company, 90 percent owned by CK Hutchison, has operated the Balboa and Cristobal ports since 1997 and renewed a 25-year concession in 2021. Story continues below advertisement Flores on Thursday criticized the renewal as 'unfair' and 'abusive,' alleging that it was signed without proper authorization and failed to deliver adequate financial returns. His first lawsuit seeks to outright nullify the concession, while the other asks the court to declare it unconstitutional. 'The ports are ours; they belong to the Republic of Panama, and therefore to all Panamanians,' Flores declared at a press conference on Thursday. 'It doesn't seem right to me that other people, in other places, are negotiating the future of assets that belong to us, the Panamanians.' The lawsuits have the backing of Mulino, who also endorsed an April 7 audit of Panama Ports Company by Flores's office, citing alleged royalty underpayments and irregularities in the concession renewal. The results of that audit have yet to be released. 'The Court now has a decision in its hands regarding the Comptroller's well-founded claim. We will wait for the verdict,' Mulino said on the lawsuits at the press conference on Thursday. 'The country will be fully informed about the decisions when they are made,' he said. 'But at this moment, I don't see the continuation of that Panama Port [Company] contract, amended or not.' Story continues below advertisement Should the court rule in favor of Flores, it could complicate U.S. asset management giant BlackRock's bid to gain control of the strategic shipping lanes. In March, BlackRock, along with Switzerland-based Mediterranean Shipping Company, formed a buyer consortium to acquire Panama Ports Company as part of a broader deal involving 42 CK Hutchison-owned container terminals worldwide. The deal remains subject to approval from the Chinese regime. On July 28, CK Hutchison announced that it would add a 'major strategic investor from mainland China' to the consortium, in an effort to secure approval from 'all relevant regulatory authorities.' The inclusion of a Chinese partner is expected to ease political pressure from Beijing, which has perceived the proposed sale as a threat to its overseas interests, particularly the transfer of strategic terminals near the Panama Canal to a consortium backed by a major U.S. financial institution. Since the announcement of the deal, Chinese state-aligned media have launched a coordinated propaganda campaign targeting CK Hutchison and its founder, 96-year-old billionaire Li Ka-shing. Story continues below advertisement Ta Kung Pao, a Hong Kong-based newspaper linked to the Chinese Communist Party (CCP), published a series of blistering commentaries accusing Li of 'betraying and selling out all the Chinese people' and urging him to 'think carefully about what position and which side to stand on.' Li, who officially retired in 2018, is personally involved in negotiating the port deal that's widely seen as an effort to offload assets caught in escalating geopolitical tensions between China and the United States. Since his reelection, U.S. President Donald Trump has repeatedly suggested that the United States should regain control of the Panama Canal, citing overcharges for its use on U.S. ships and the CCP's growing influence over the key waterway. 'Above all, China is operating the Panama Canal. And we didn't give it to China. We gave it to Panama, and we're taking it back,' Trump said in his second inaugural speech CK Hutchison and the White House did not respond to requests for comment by publication time. BlackRock declined to comment.
Bloomberg
3 days ago
- Bloomberg
Panama Official Seeks Court Review of Hutchison Ports Contract
Panama's comptroller general asked the Supreme Court to review the government's contract extension with a unit of CK Hutchison Holdings Ltd., potentially throwing a new wrench in the company's deal to sell the business. Anel Flores, the Panamanian official, said he asked the court to find the contract extension unconstitutional and declare it null and void. 'The contract was bad, one-sided and abusive, against the interests of the country,' he said. Panama is the true owner of the ports, he said.
Yahoo
3 days ago
- Yahoo
Panama auditor files suit to scrap CK Hutchison-controlled port contract
PANAMA CITY (Reuters) -Panama's comptroller general, Anel Flores, said on Wednesday he had filed suit to the nation's Supreme Court against a contract to operate ports near the Panama Canal, held by a local firm controlled by Hong Kong-based CK Hutchison. Flores said the two suits were to declare the unconstitutionality and to nullify the contract to operate the Balboa and Cristobal ports. The Supreme Court would still need to accept the request to hear the comptroller's complaint. The suits stem from a months-long audit spearheaded by Flores, who has publicly complained that the contract did not serve the nation's interests. Flores has not made the full audit public, but said on Wednesday that it had revealed "many irregularities." The complaint could throw a wrench in a planned deal for a consortium involving Italian billionaire Gianluigi Aponte's family-run shipping company MSC and U.S. investment firm BlackRock to buy out most of CK Hutchison's global port business, including the two ports. CK Hutchison holds a 90% stake in the local Panama Ports Company, which had a 25-year concession to operate the ports renewed in 2021. The sale has faced pressure from both Washington and Beijing, with Reuters reporting that Chinese state-run shipping giant COSCO could also be brought into the deal. "They are talking about billion-dollar deals here, which do not include Panama, the true owner of the Panamanian ports," Flores said. "That is why we have taken the actions we are taking, because we are not satisfied." Sign in to access your portfolio
