Panama Ports Corporation Offices Raided Amid Allegations

On Thursday, officials from Panama’s attorney general’s office conducted a raid on the Panama Ports Corporation (PPC) offices. This company, linked to China and recently managing the two major ports of the Panama Canal, is now under investigation.

The inquiry centers on accusations that PPC has been withholding crucial information regarding the management of the canal ports from government bodies.

PPC is a subsidiary of CK Hutchison Holdings, which operates out of Hong Kong and is led by businessman Li Ka-shing. The company had oversight over the two primary ports along the Panama Canal—located at the Balboa and Cristobal trade routes—since 1997. These ports managed about 40% of total canal traffic.

A significant ruling by Panama’s Supreme Court in January declared that PPC’s contract to manage these ports was unconstitutional, following a lawsuit by Comptroller General Anel Flores. This legal action resulted from extensive audits that revealed multiple violations linked to PPC’s management of the ports, which Flores claims cost the nation around $1.2 billion.

The Supreme Court’s ruling came into effect this past Monday. Following this, the government, led by conservative President José Raúl Murino, swiftly ordered the temporary occupation of the two ports as they move towards establishing new management agreements with different private companies.

The newspaper La Prensa reported that a team from the Attorney General’s Office, directed by Prosecutor Azael Samaniego, along with support from police and maritime authorities, raided three PPC offices located in Panama City’s Terrazas de Albrook shopping mall.

While specific details were sparse, Samaniego noted that all retrieved documents would be safeguarded by the Public Ministry. He mentioned an ongoing “unresolved criminal case” but refrained from elaborating on the specific allegations for the integrity of the investigation. An anonymous source indicated that PPC is suspected of keeping critical information about the operations of Balboa and Cristobal under wraps.

Another local paper, La Estrella de Panama, reported that investigators were seen removing boxes from the premises. They acknowledged that this raid was indeed tied to PPC’s alleged concealment of information and noted the government’s previous struggles to access the office.

Officials from the Panama Maritime Authority had sought access to the PPC office but were refused entry. The company has not submitted any financial reports to Panamanian authorities, leaving the Comptroller’s Office only to estimate losses incurred from PPC’s management.

According to the Comptroller, the total revenue loss was approximately $1.3 billion; however, some internal estimates suggest this figure might be even higher. La Estrella de Panama highlighted that the raid coincided with President Murino’s press conference, where he expressed frustration over failed attempts to engage with PPC executives, stating every effort had met with disregard.

President Murino stood by his administration’s response following the Supreme Court’s ruling, countering PPC’s critiques of their contract’s nullification. He exclaimed, “No one is going to kick us out of our ports,” emphasizing the authority of his government amidst the controversy.

CK Hutchison Holdings, PPC’s parent company, has labeled the Supreme Court’s decision as “unlawful” and criticized the government’s actions as potentially damaging to the operational capacity of the ports. They mentioned contemplating both domestic and international legal actions against Panama.

In a protective stance, the Chinese Foreign Ministry also assured that they will defend the legitimate rights of the company.

As of now, following the annulment of the PPC contract, the Panamanian government temporarily assigned control of Balboa Port to APM Terminals, part of the Maersk group, for a 180-day period to ensure the seamless operation of the canal port. Cristobal Port sees similar temporary management by TIL Panama, a subsidiary of Mediterranean Shipping Company.