A company controlled by Hong Kong-based CK Hutchison (0001.HK), opens new tab has invested $1.7 billion in two ports near the Panama Canal, it said on Wednesday, surpassing the amount required under its contract, which is being audited by Panamanian authorities.
Panama Ports Company (PPC), in which CK Hutchison owns a 90% stake, had its 25-year operating concession for the Balboa and Cristobal ports renewed in 2021.
The Panamanian government launched an audit of the contract in January, potentially complicating a high-profile deal by a group led by U.S. investment firm BlackRock (BLK.N), opens new tab for most of CK Hutchison's global port business, including the two ports.
Comptroller General Anel Flores said this week that the audit had already found that Panama "left $1.3 billion on the table" due to tax incentives and benefits granted to CK Hutchison.
CK Hutchison has denied any wrongdoing or irregularities, and on Wednesday it outlined how it had gone beyond the financial conditions of the agreement.
It said its investments in Panama had surpassed not only the $50 million required in the original concession contract signed in 1997, but they had also eclipsed a $1 billion requirement contained in a 2005 addendum.
"During the term of the concession, PPC has paid the State $668 million ... far exceeding the contributions of any other port operator in Panama," it said.
Tax exemptions granted to PPC by the government were "precisely the same tax exemptions granted to all other port operators in Panama," it added.
"Panama Ports Company continues to call for respectful coordination and consultation to protect the concession," the company said.
CK Hutchison, the telecoms-to-retail conglomerate owned by Hong Kong tycoon Li Ka-shing, has found itself caught in a highly politicized tug of war since U.S. President Donald Trump returned to office.
Trump has repeatedly threatened to take control of the Panama Canal due to the presence of Chinese and Hong Kong firms in the Central American country's maritime business and praised the $22.8 billion BlackRock deal.
Chinese authorities have criticized it however, and China's market regulator is launching an antitrust review of it.
Panama's contract audit is nearing completion, state comptroller Flores said this week. Since February, Panama's Supreme Court and the attorney general's office have also started reviews of the concession and the conditions of its renewal.
