Panama official seeks court review of CK Hutchison port contract
Panamanian official Anel Flores said that he asked the court to find unconstitutional a 2021 extension for Panama Ports' contract to operate two ports along the Panama Canal and declare it null and void.
'The contract was bad, one-sided and abusive, against the interests of the country,' he told a briefing in Panama City.
Panama Ports did not immediately respond to a request for comment.
The Panama terminals are at the centre of the geopolitically delicate deal for the 43 ports owned by Hong Kong tycoon Li Ka-shing's CK Hutchison. A buyer consortium backed by BlackRock is seeking to acquire the business, with the American asset manager taking control of Panama Ports.
While the deal has been smiled upon by US President Donald Trump, who has sought to reduce foreign interests in the strategically important waterway, it's met with opposition in Beijing, which considers BlackRock a proxy for American influence. China has also separately cautioned that antitrust reviews shouldn't be bypassed, so as to prevent an agreement from being rushed into.
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'What is Panama's business is that the ports are ours, they belong to the republic of Panama,' Flores said. 'I don't think it's right that, at other latitudes, other people are negotiating the future using property that belongs to Panama.'
The transaction has remained pending while the parties involved seek to resolve the issues. CK Hutchison said this week that it may invite an unnamed 'major strategic investor' from China to join the consortium, a move that's likely to help remove obstacles that have been holding up the completion of a deal.
The Chinese investor would join as a significant member of the group, CK Hutchison said, hours after the expiry of a 145-day exclusive talks window with the consortium. State-owned China Cosco Shipping has been negotiating a powerful role for itself as a condition to join the group, Bloomberg News reported.
CK Hutchison this week reiterated that it 'will not proceed with any transaction that does not have the approval of all relevant authorities'.
Flores said in April that an audit by his office found that Panama Ports had failed to get proper approvals for its contract extension.
Tax breaks under the contract have also cost the Central American nation US$1.3 billion, as a series of tax-exempt shell companies operating on Panama Ports's grounds helped the firm lower the share of profits it paid the government, he told a press conference at the time. BLOOMBER
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