(By Sun Meixin, Editor: Zhang Guangkai)
Li Jiacheng's CK Hutchison Holdings has had a 28-year concession in Panama's port, which was recently ruled unconstitutional locally, and its subsidiary company immediately issued a rebuttal.
The Supreme Court of Panama made a ruling on January 29 local time, ruling that the contract for the operation of two ports near the Panama Canal by Li Jiacheng's CK Hutchison was unconstitutional.
The notice also detailed that this relates to the contract for the development, construction, operation, management, and operation of container, passenger, bulk, and general cargo terminals at Balboa Port and Cristobal Port. The contract was signed between the state and the Panama Ports Company Limited.
At a regular press conference on January 30, the Foreign Ministry spokesperson Guo Jiakun stated that China would take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises.
Due to the ruling by the Supreme Court of Panama, CK Hutchison's stock price fell immediately, with the maximum drop exceeding 5.7%, marking the largest decline in recent times. By the close of the Hong Kong market, the stock price of CK Hutchison narrowed its decline to 4.6%, closing at HK$63.25 per share.
CK Hutchison's Panama Ports Company responded, stating that it had not yet received notification of this ruling, but considered the ruling to violate the relevant legal framework and approved legal provisions, violating integrity and breaching the spirit of the contract, which is disgraceful. This contract has been ensuring the operation of the container terminals at Balboa Port and Cristobal Port by the Panama Ports Company for nearly 30 years.
This ruling is the latest unreasonable attack by the Panamanian government against Panama Ports Company and its investors over more than a year, including a series of absurd actions regarding this concession and the Panama Ports Company.
It was also mentioned by Panama Ports Company that the company and its investors have invested over $1.8 billion in infrastructure, technology, and talent development in Panama, an amount several times higher than the investment in any other port operations in the country. The actions of the Panamanian government contradict its legal and contractual framework, are self-contradictory, and absurd, not only harming responsible concessionaires and investors, scaring away other investors, but also continuing to damage Panama's reputation as a reliable jurisdiction and weaken its position as a globally competitive logistics hub.
Finally, Panama Ports Company called on the company and investors to continue seeking cooperation with the Panamanian government through mutual respect and consultation to avoid chaos and maintain the concession that provides high-quality port services to Panama and even the world.
The two ports in Panama were part of the plan announced by CK Hutchison last March to sell 43 ports in 23 countries worldwide, and due to various issues, the transaction has been full of twists and turns. Industry analysts believe that the Panama ruling could negatively affect the valuation and profitability of the port transaction, making the transaction more uncertain.
After announcing the port transaction last year, CK Hutchison faced many controversies. Subsequently, CK Hutchison repeatedly emphasized in announcements and public statements by its management that this transaction would never be carried out in any illegal or non-compliant manner.
Later, it was reported that the state-owned enterprise China Shipping Container Lines Group (referred to as "COSCO") joined the potential buyer consortium.
By the end of last year, foreign media reported that in order to advance the transaction, the parties involved considered dividing the transaction into separate parcels of different ownership, so that COSCO might have larger port shares in regions more friendly to China.
Original: toutiao.com/article/7601082382146257418/
Statement: This article represents the views of the author.