Posted on April 9, 2025
Panama’s top auditor said Hong Kong-based CK Hutchison owes hundreds of millions of dollars in unpaid fees and failed to get necessary clearances for two key ports of the Panama Canal, dealing a blow to plans by U.S. asset manager BlackRock to buy the ports as part of a $22.8 billion transaction.
BlackRock’s acquisition of the ports situated at each end of the Panama Canal, along with some 40 other ports around the world, has become a flashpoint between the U.S. and China at a time when the two superpowers are also squaring off in an escalating trade war.
A consortium led by BlackRock announced the port deal with Hutchison’s 96-year-old billionaire founder Li Ka-shing last month, after President Trump repeatedly said that China asserted too much control over the Panama Canal and pledged to take back the shipping lane. Trump touted the BlackRock deal in his March 4 address to Congress, saying it showed his policies were working.
Beijing has signaled its unhappiness with the transaction, with some state-linked media portraying the deal as a betrayal of the Chinese people. China’s antitrust officials have said they would review the acquisition. In recent weeks, Beijing has also been working to line up alternative buyers should the deal between BlackRock and Hutchison fall through, people familiar with the matter say.
An initial April 2 deadline Hutchison and BlackRock set for signing definitive documents for the deal passed with no announcements.
But comments made late Monday by Panamanian Comptroller General Anel Flores introduce the most serious hurdle yet to BlackRock taking control of the ports. Flores said he was presenting the findings of an audit that began after the deal between Hutchison and the BlackRock consortium was announced.
Hong-Kong based CK Hutchison agreed to sell two Panamanian ports last month
Flores said Panama Ports, the Hutchison unit that operates the ports, didn’t get the necessary clearances when it extended its 25-year contract with the Panama Maritime Authority in 2021. He said the company used tax-exempt subcontractors to cut the amount it pays the Panama government and failed to share 10% of its profits with the government.
Panama Ports currently owes the Panama government $300 million, Flores said, adding that he planned to file criminal charges with the attorney general and brief the Panama Maritime Authority, which oversees the ports and has the power to terminate the concessions.
“There are breaches, nonpayments and countless things that were wrongly calculated,” Flores told reporters in Panama City.
A senior Panama official said that the legal process could take between six months and a year and had the potential to scuttle the deal.
BlackRock and Hutchison didn’t immediately respond to a request for comment.
In public remarks Monday before Flores’s news conference, BlackRock’s chief executive, Larry Fink, said that the growing tariff rift between the U.S. and China could complicate the deal.
“Of course it can, but there’s going to be nine months of regulatory review. So we’ll see how this all plays out,” Fink said. “I’m actually pretty optimistic that we will find a solution, because if you look at it, everything was done in the right order. It was not done politically despite all the narrative.”
People familiar with the matter said Beijing has already approached some billionaires in mainland China and Hong Kong, as well as Chinese state-backed companies, about whether they would be interested in acquiring the ports.
Chinese state shipping giants including Cosco Shipping Lines and China Merchants have begun informal talks with Hutchison to take over some of the ports should the BlackRock deal fail, the people said.
