Hong Kong billionaire Li Ka-shing’s CK Hutchison Holdings has called for the rule of law to be respected after Panama took legal action to nullify its ports contracts, with the country’s leader also suggesting its operations be taken over by state partnerships.
Legal experts said on Friday that the Hong Kong-based conglomerate could face “significant financial, operational and reputational losses” if the two Panama Canal ports it operated were taken over.
Panama’s president, Jose Raul Mulino, floated the idea on Thursday, saying he could pursue it if the Supreme Court ruled that the port contracts signed with CK Hutchison were unconstitutional.
While Mulino stressed that it was still “a draft” idea, it has thrown another wrench into CK Hutchison’s controversial US$23 billion deal to sell its stakes in 43 ports, including the two in Panama, which are at the centre of a geopolitical struggle between Beijing and Washington.
CK Hutchison holds a 90 per cent stake in Panama Ports Company (PPC), which had a 25-year concession to operate the Balboa and Cristobal ports renewed in 2021.
Panama’s comptroller general filed two suits with the Supreme Court this week, aiming to declare the agreement unconstitutional and nullify the contracts on the basis that the renewal did not follow the required legal steps.
