Hong Kong firm appeals for legal protection of investors as its Panama Ports contract faces lawsuits
By Kanis Leung - Associated Press - Friday, August 1, 2025
HONG KONG — A subsidiary of a Hong Kong conglomerate entangled in U.S.-China tensions appealed on Friday for legal protection for businesses in Panama after the company’s contract over its Panama Canal port assets has been faced with lawsuits in the Central American country.
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.
Hutchison Calls for “Respectful Coordination” and Consultations with Panama
A day after Panama’s Comptroller announced that his office is seeking to void the concession for the terminal operations in Balboa and Cristobal, CK Hutchison issued a statement calling for coordination with the Government of Panama. The Hong Kong-based company is seeking to protect the concession, which is seen as one of its key assets, despite the political firestorm that has been created in 2025.
The Panama Ports Company was formed in 1997, and Hutchison owns 90 percent of the company, with the Government of Panama holding the remaining 10 percent. It is responsible for the operations of the terminals at each terminus of the Panama Canal. Balboa is the larger of the two terminals, handling approximately 2.3 million TEU in 2024, while Cristobal handled just over 1 million TEU. Most of the volume handled in the ports, however, is transshipments. Data shows that 90 percent of Cristobal’s volume is transshipments, while it is 95 percent at Balboa.
After Panama filed two lawsuits seeking to rule the contract extension for the terminals unconstitutional and void, Panama Ports Company, via Hutchison, responded with a statement calling for “respectful coordination and constructive consultations” to protect the concession. It highlights that it has had a positive impact on Panama, creating jobs and contributing to the economy.
“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,” the company states.
Panama, under pressure from the Trump administration, has sought ways to reduce its involvement with China. The concession for the port terminals has become one of the focal points criticized by the Comptroller’s office, which contends the extension was not conducted legally in 2021.
Panama’s President Jose Raul Mulino yesterday, July 31, told reporters he did not think the concession would continue. He said they would await the court’s decision but suggested a new public-private partnership might be formed to run the terminals.
Panama has also been critical of the sale process after CK Hutchison agreed to sell its interest in the Panama company to a consortium led by BlackRock and MSC’s Terminal Investments Ltd. Hutchison addressed the criticisms in its statement.
“At the appropriate time within the sale process, PPC (Panama Ports Company) will communicate with relevant parties, including the Government of Panama,” writes Hutchison. “We affirm that we believe engagement with the Government of Panama is vital to discuss the way forward for PPC and that we want to work with the Government for a better future to support the people of Panama.”
China has been highly critical of the sale process, accusing the U.S. of driving it. China says the deal would threaten its global trade and has reportedly demanded a role for a Chinese company in the consortium. Hutchison confirmed at the beginning of the week that it was exploring reworking the deal and inviting a major Chinese company to participate in the purchase of its terminal portfolio.
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