Panama’s attorney-general to investigate HK-based CK Hutchison’s port contract
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A 25-year contract awarded to Panama Ports Company, in which CK Hutchison has a 90 per cent stake, for the concession of the Balboa and Cristobal ports has been under audit since January.
PHOTO: REUTERS
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PANAMA CITY – Panama has opened an investigation into a contract granted to Hong Kong-based CK Hutchison for the operation of two ports in the Central American country, Attorney-General Luis Carlos Gomez said on April 8.
Mr Gomez made the announcement after Panama’s comptroller-general earlier this week criticised the contract
Comptroller Anel Flores said Panama “left US$1.3 billion (S$1.75 billion) on the table”, referring to tax incentives and benefits granted by the government to CK Hutchison.
“This prosecutor’s office is conducting an investigation initiated ‘ex officio’ for the alleged commission of a crime against public administration and other crimes against the state,” Mr Gomez said in a letter sent to Ms Flores on April 8.
The 25-year contract awarded to Panama Ports Company – in which CK Hutchison has a 90 per cent stake – for the concession of the Balboa and Cristobal ports has been under audit since January.
The audit is nearing completion, Ms Flores said on April 7, adding that a lawsuit will be filed against government officials who authorised the contract.
Since February, Panama’s Supreme Court has also discussed the concession.
The contract reviews are seen as possible roadblocks in a key US$22.8 billion deal announced in March by a group led by US investment firm BlackRock to get access to CK Hutchison’s port business in 23 countries, including the two ports in Panama.
CK Hutchison and BlackRock did not immediately reply to requests for comment.
BlackRock chief executive Larry Fink, speaking earlier this week at a conference in New York, said the deal was not made for geopolitical reasons, but the company was aware that China would review it as much as other jurisdictions.
Regulatory review of the deal could take nine more months, Mr Fink said, adding that he was optimistic it would be approved.
China’s Embassy in Panama said in a social media post on April 8 that it has and will continue respecting Panama’s sovereignty, and added that the relationship between the US and Panama should not be “excluding”.
If irregularities in the concession renewal are confirmed by Panama’s government or the Supreme Court declares the contract to be unconstitutional, the concession could be revoked, lawyers and experts have said. REUTERS
