‘Bullying’ claims and China scrutiny ramp up pressure on CK Hutchison
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Mr John Lee said Hong Kong urges foreign governments to provide a fair and just environment for enterprises.
PHOTO: REUTERS
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HONG KONG - Hong Kong is opposed to “bullying tactics” by foreign governments, the city’s leader said on March 18 when asked about conglomerate CK Hutchison’s port deal with US firm BlackRock amid reports that China is also scrutinising the sale.
CK Hutchison said in March it agreed to sell most of its global US$22.8 billion (S$30.36 billion) port business,
The deal has become politicised, with US President Donald Trump hailing the deal after previously calling for the Panama Canal to be removed from what he says is Chinese control.
Other American politicians have said CK Hutchison’s operation of the ports represented a security risk to the US due to its reliance on the trade of goods through the canal.
“(Hong Kong) government urges foreign governments to provide a fair and just environment for enterprises,” Mr Lee told reporters at his weekly press conference.
“We oppose the abusive use of coercion or bullying tactics in international economic and trade relations.”
On March 18, Bloomberg News reported Chinese authorities have begun looking into CK Hutchison’s ports transaction, directing multiple agencies to review the deal for potential security risks and antitrust violations.
Beijing’s examination of the deal doesn’t necessarily mean any action will be taken subsequently, the report added, as large deals often attract regulatory attention.
CK Hutchison did not immediately respond to a request for comment on the report.
It has previously said the deal is “purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports”.
It was not immediately clear what levers, if any, China could pull to block the deal, given the business that CK Hutchison is selling is outside China and Hong Kong, while the company itself is registered in the Cayman Islands.
Hong Kong leader Mr Lee told reporters “any transaction must comply with legal and regulatory requirements”, adding the city would handle it “in accordance with the law.”
Shares of Hutchison fell as much as 4.9 per cent on March 18, hitting their lowest since March 4.
A Hong Kong-founded and -listed firm owned by billionaire Li Ka-shing, CK Hutchison has said its business operations are independent from China.
A week after news of the ports deal, China's Hong Kong and Macau Affairs Office reposted two commentaries criticising CK Hutchison and saying the deal was a betrayal of China and neglected national interests.
Hong Kong’s edge as an international financial centre is expected to erode further as it gets squeezed by geopolitical tensions, some executives and analysts have said.
As the controversy escalates, two sources told Reuters on March 17 that CK Hutchison will not hold earnings conferences after it reports results on March 20, a highly unusual move for the conglomerate. REUTERS
