- Panama officials reported that the Hong Kong company CK Hutchinson, which operates two ports at the canal, owes $300 million in unpaid fees. This announcement could jeopardize a proposed deal to sell the ports to a U.S. company.
- Panama’s top auditor said he plans to file criminal charges in the case and meet with authorities.
- CK Hutchinson is negotiating a deal valued at nearly $23 billion to sell the ports to the U.S. company BlackRock.
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Panama officials claimed that the Hong Kong company CK Hutchinson owes hundreds of millions of dollars in unpaid fees and has failed to obtain proper clearance. CK Hutchinson operates two key ports at both entrances of the Panama Canal.
On April 7, the top auditor announced that the Hutchinson subsidiary managing the ports failed to obtain necessary clearances after extending its 25-year contract with the Panama Maritime Authority in 2021.
What accusations have officials made against Hutchinson?
The auditor noted that the company used tax-exempt subcontractors to reduce the amount it paid to Panama. Hutchinson allegedly failed to share the required 10% of profits with the Panamanian government.
Panama Ports, a subsidiary of CK Hutchison, now owes the country $300 million. The auditor said he intends to file criminal charges with the attorney general. He will also meet with the Panama Maritime Authority, which oversees the ports.
Why does it matter?
The announcement potentially jeopardizes a nearly $23 billion deal with the U.S. company BlackRock to buy the two ports.
BlackRock’s acquisition of the ports is yet another point of contention between the U.S. and China amid a growing trade war.
What statements has the Trump administration made in the past?
A group of buyers led by BlackRock recently announced a port deal with the billionaire founder of Hutchison. This came as President Donald Trump continued to accuse China of exerting excessive control over the Panama Canal, a claim rejected by both Panama and Beijing.
U.S. Secretary of State Marco Rubio previously expressed concerns China could use the ports as a “choke point” to cut off U.S. trade.
Trump vowed to take back control of the key shipping route and lauded BlackRock’s deal, arguing it shows his policies are working.
What is China’s stance on the potential deal?
Beijing is reportedly displeased with the potential agreement, and Chinese antitrust officials state they are reviewing it. China’s State Administration for Market Regulation initiated a probe last month to determine whether the purchase violates Beijing’s anti-monopoly laws.
According to The Wall Street Journal, China is also exploring other potential buyers if the deal between BlackRock and Hutchinson fails to materialize.
