PANAMA CITY, Feb 27 (Reuters) – On Thursday, Panamanian authorities conducted a search at the port unit of CK Hutchison, a Hong Kong conglomerate, amidst ongoing disputes over control of two important ports in the Panama Canal.
This operation comes as tensions rise between the U.S. and China over global trade routes, affecting CK Hutchison's Panama Ports Company (PPC), which recently lost contracts to operate two terminals at the canal's entrances on both the Pacific and Atlantic sides.
The search was not connected to the government's decision last month to terminate the contracts that gave PPC control over the ports, according to a source familiar with the situation.
The source, who wished to remain anonymous, noted that the investigation is being conducted solely by Panama's Public Ministry under its legal authority. The Panamanian government did not specify CK Hutchison as the focus of the search.
Before the search, President Jose Raul Mulino stated he was uncertain about China's potential response following CK Hutchison's loss of the ports. He expressed his belief that "nothing is going to happen" and criticized the company for acting with "arrogance" and a lack of transparency.
Mulino remarked that CK Hutchison had operated in Panama for decades without regard for local regulations, and emphasized that China needed Panama significantly, as much of its goods, including gas, transited the canal. "Maybe they need us more than we need them," he added.
Panama's foreign ministry has already communicated its stance to the Chinese ambassador regarding the situation.
CK Hutchison has not commented on the raid or Mulino's statements yet. Earlier this week, the company claimed that Panamanian authorities threatened its employees with legal action if they did not vacate the canal ports.
On Friday, China's Foreign Ministry affirmed its strong stance on the ports in Panama, stating it would "resolutely safeguard the interests of its enterprises."
The Hong Kong government also did not respond to requests for comment.
CK Hutchison's stock fell 0.6% in Hong Kong following these developments.
The Hong Kong company has agreed to sell many of its global ports, including the Panamanian terminals, in a deal valued at $23 billion to a consortium led by BlackRock and Mediterranean Shipping Company (MSC). This deal has faced criticism from Beijing but was welcomed by U.S. President Donald Trump, who aimed to reduce Chinese influence over the canal.
The disputed ports, Balboa and Cristobal, will be managed temporarily by Maersk and MSC, as per the Panamanian government's announcement.
Panamanian media previously covered the raid, showing images of officials, some wearing vests marked with the initials of the investigative police, in a parking area in the upscale Albrook district of Panama City. The images depicted officers loading boxes into a police vehicle.
The exact location of the raid could not be confirmed independently.
Recently, Panama's top court ruled CK Hutchison's contracts to run the canal's port terminals unconstitutional, prompting the government to annul them. This legal decision has drawn attention from both Washington and Beijing, particularly following Trump's pressure for Panama to decrease Chinese influence over the canal, which is vital for about 5% of global maritime trade.
CK Hutchison believes the government's decision is unlawful and is considering taking legal action.