The comptroller of Panama said on Monday that the country will file criminal complaints against officials at CK Hutchison Holdings, the Hong Kong conglomerate that runs ports on each end of the Panama Canal, as well as Panamanian government officials, after determining that CK Hutchison’s contract heavily disadvantages Panama, the Financial Times reported.
The announcement comes as CK Hutchison considers a $23 billion sale of operations at the two ports to a consortium including U.S.-based investment firm BlackRock Inc. (NYSE: BLK) and Geneva-based ocean carrier Mediterranean Shipping Co.
A subsidiary of CK Hutchison in 1997 renegotiated a contract that has since cost the country $1.3 billion in revenue, Panama’s comptroller general, Anel Bolo Flores, claimed.
Flores said the Panamanian people and prosecutors deserve an explanation for “such benevolence in a contract that has been abusive to say the least,” the Financial Times reported.
Further complicating the potential BlackRock sale is an ongoing review of the purchase by officials in China. The sale would include terminal operations at the Balboa and Cristobal ports and was announced soon after statements by President Donald Trump that the U.S. should retake control of the canal for reasons of national security.
U.S. Defense Secretary Pete Hegseth is in Panama and was slated to meet President José Raúl Mulino on Tuesday. Panamanian officials have dismissed Trump’s concerns that China has too much control of the canal.
Larry Fink, chair of BlackRock, said at a meeting of the Economic Club of New York on Monday that the sale will likely move forward over China’s objections, the Financial Times reported. Fink said the port operations in Panama are only a small fraction of the value of a deal designed to ensure U.S. access to 43 ports in nearly two dozen countries, according to investor-oriented news outlet Benzinga.
Benzinga reported that CK Hutchison is alleged to owe hundreds of millions of dollars’ worth of unpaid fees and that the contract with the Panama Maritime Authority was extended without proper clearances.
Related:
China to review sale of Panama Canal shipping terminals to US investor: Report
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