Shares of CK Hutchison Holdings Ltd. took a significant hit on Friday after a sharp critique from China’s Hong Kong and Macau Affairs Office regarding the company’s decision to sell its controlling stake in Panama’s ports. The move, which has stirred political tensions, was perceived as an attempt by CK Hutchison to appease former President Donald Trump. The commentary, which was originally published in the pro-Beijing Ta Kung Pao newspaper, raised serious concerns about the company’s alignment with China’s interests, urging firms to carefully consider their political stance.
The Hong Kong and Macau Affairs Office’s statement, reposted on its website, condemned the Hong Kong-based conglomerate, founded by billionaire Li Ka-shing, for what it described as “spineless groveling” and “selling out all Chinese people.” The commentary implied that CK Hutchison’s actions were at odds with China’s national interests, especially in light of the ongoing geopolitical tension between China and the United States.
Following the announcement of the Panama port sale, CK Hutchison’s stock plummeted by as much as 6.7%—its sharpest decline since September 2022. This drop reflects investor unease over potential Chinese intervention in the deal, which centers on assets located outside mainland China. Despite this, the transaction does not require Beijing’s approval.
The Hong Kong and Macau Affairs Office warned that companies involved in such high-profile deals should carefully assess the political ramifications. “In the face of such an important issue, companies must think critically about the position they take and the side they support,” the commentary stated.
CK Hutchison has yet to respond to requests for comment regarding the backlash.
While the deal involves assets outside of China, the growing disapproval from Chinese authorities adds complexity to the decision-making process for executives caught in the crossfire of the escalating China-U.S. rivalry. CK Hutchison and its sister company, CK Asset Holdings Ltd., are both registered in the Cayman Islands, a move made during a corporate restructuring in 2015. Despite this, nearly 90% of CK Hutchison’s revenue comes from markets outside of mainland China and Hong Kong.
The controversy stems from CK Hutchison’s recent agreement to sell a controlling stake in Panama’s ports to BlackRock Inc., a move that has drawn political attention. The deal, potentially one of the largest acquisitions of the year, aligns with Trump’s prior concerns over the control of strategic ports near the Panama Canal, a key waterway for international trade.
David Blennerhassett, an analyst at Quiddity Advisors, noted that while the transaction is expected to be completed in 2025, market fluctuations and regulatory hurdles may influence the stock price in the meantime. Despite these potential challenges, he described the criticism from Ta Kung Pao as expected, calling it “face-saving bluster.”
Trump has previously raised unsubstantiated claims that China exerted undue influence over the Panama Canal, a critical shipping route, and has demanded reduced fees for U.S. naval and merchant vessels using the canal. The Ta Kung Pao commentary echoed these sentiments, accusing the U.S. of using the Panama port deal to further its political agenda and undermine China’s development.
Denise Wong, an analyst at Bloomberg Intelligence, pointed out that the deal appears commercially favorable, with the value of the port assets falling within the higher end of the industry’s range. However, she cautioned that there are risks associated with the deal’s execution, as CK Hutchison’s market capitalization increased by approximately $5 billion after the announcement—just a fraction of the $19 billion expected from the sale.
This latest controversy is not the first time Li Ka-shing has faced criticism from Chinese state media. Over the years, Li’s companies have faced scrutiny for selling off properties in mainland China, leading to accusations about his loyalty to the country. During the 2019 political unrest in Hong Kong, Li’s neutral stance and vague public messages, including references to Chinese poetry, drew Beijing’s ire, as critics saw them as insufficiently supportive of the government’s position on the protests.
The fallout from the Panama port deal could have lasting effects on Li Ka-shing’s legacy and the future direction of CK Hutchison, with Chinese authorities signaling that companies must carefully navigate the increasingly fraught relationship between China and the U.S.
Related Topics:
Tesla’s Stock Struggles as Musk’s Political Involvement Fuels Investor Concerns
Financial Workers Exposing Sensitive Data via Personal Apps, Report Finds
U.S. Labor Market Seen Holding Steady Ahead of Tariffs Turbulence
