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Conglomerate CK Hutchison Holdings, owned by Hong Kong’s wealthiest individual, announced that the Panamanian government’s forced takeover of its port assets is illegal and may lead to legal action. Authorities took control of two crucial terminals amid escalating US-China tensions centered around strategic infrastructure and national security concerns.
Following the seizure, the company’s shares declined 2.7 percent to HKD62.56 (approximately USD8), although they have increased nearly 60 percent over the past year.
The government of Panama recently entered the Balboa and Cristobal terminals, managed by a subsidiary, and assumed administrative and operational control, pushing out the company’s representatives. This action came after Panama’s Supreme Court rejected the operating rights of Panama Ports for these terminals last month. Both facilities connect Atlantic and Pacific trade routes.
CK Hutchison labeled the takeover as unlawful, warning that the move poses significant risks to operations, health, and safety at both terminals. Operations at the ports were halted immediately following the government’s intervention.
The company and Panama Ports are consulting legal advisors regarding the court ruling and the seizure of the terminals. They have stated their intention to pursue all available legal remedies, including international proceedings against Panama, its officials, and any third parties found colluding with them, to protect their rights and interests.
Hong Kong’s Secretary for Commerce and Economic Development formally protested the takeover with the Panamanian consul in Hong Kong. The official emphasized that the action breaches the spirit of the contractual agreement and assured that the Hong Kong government will vigorously defend the legitimate rights of its enterprises abroad.
Historically, CK Hutchison secured 30-year operating rights for both ports in 1997 and renewed these agreements in 2021 through 2047. Last year, Balboa and Cristobal ports handled 2.7 million and 1.2 million containers, respectively, representing 39 percent of Panama’s total container throughput across its five main ports.
In March of the previous year, amid security concerns raised by then-President Donald Trump, CK Hutchison announced plans to sell its major global port assets, including those in Panama, to a consortium led by the US investment giant BlackRock for USD19 billion.
By last July, the company revealed plans to include investors from mainland China as key members of this consortium, stating that no transaction would proceed without approval from all relevant regulatory authorities.
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