Hong Kong’s richest man is in hot water over his company’s Panama Canal ports deal

HONG KONG (news agencies) — Hong Kong tycoon Li Ka-shing’s business empire is in the crosshairs after CK Hutchison Holdings chose to sell its Panama Canal port assets to a consortium that includes U.S. investment firm BlackRock Inc., apparently angering Beijing.

Over the past week, Beijing’s Hong Kong affairs offices have posted scathing commentaries from a local state-backed media outlet over the tentative deal by Hutchison, which is controlled by Li’s family.

That raises questions about the deal and highlights the difficulties Hong Kong businesses face as they balance demands from Beijing for national loyalty and their own capitalist interests in the once free-wheeling Asian financial hub. Here’s what to know about the issue.

Nicknamed “Superman,” Li is among the world’s 50 richest people, with Forbes calculating his net worth at $38 billion. Li, 96, retired from his position as chairman of CK Hutchison in 2018, succeeded by his elder son Victor. But he’s still one of Hong Kong’s most influential figures.

Li’s rags-to-riches story paralleled the former British colony’s rise. His business empire touches almost every aspect of daily life in Hong Kong, from properties and supermarkets to telecommunications and utilities. Globally, his conglomerate owns assets including British drugstore chain Superdrug and European mobile phone network operator Three.

A Hutchison subsidiary has operated ports at both ends of the Panama Canal since 1997. That was one reason U.S. President Donald Trump has alleged Chinese interference with the critical shipping lane’s operations.

Li’s influence extends beyond business. He has met with top Chinese leaders and has served on the elite committee that selected Hong Kong’s leader.

Experts on ties between Beijing and Hong Kong said ruling Communist Party leaders once understood that support from the business sector was crucial for maintaining Hong Kong’s capitalist system. It’s has been strategically vital for mainland China’s economy, given the role their global networks and resources play in the country’s development. So, Li has had notable political influence.

But Li has faced criticism over some business decisions. When he sold off some mainland Chinese assets in 2015, an article published by a think tank affiliated with Chinese official news agency Xinhua accused him of being immoral.

During pro-democracy protests in 2019, Li was blasted by some pro-Beijing supporters for his perceived ambivalence about the unrest. Some other Hong Kong business leaders adopted a harsher stance.

CK Hutchison announced March 4 that it would sell all its shares in Hutchison Port Holdings and in Hutchison Port Group Holdings to the consortium that also includes BlackRock subsidiary Global Infrastructure Partners and Terminal Investment Limited, which is chaired by Italian shipping scion Diego Aponte, whose family reportedly has a longstanding relationship with Li’s.

If approved, the deal, valued at nearly $23 billion including $5 billion in debt, will give the consortium control over 43 ports in 23 countries, including the ports of Balboa and Cristobal, located at either end of the canal. The transaction does not include ports in Hong Kong or mainland China. CK Hutchison said the transaction was purely commercial in nature.

The deal pleased Trump but angered Beijing.

One of the Beijing-backed newspaper commentaries described the deal as a betrayal of all Chinese and said the company should think about which side to take. The other said great entrepreneurs are patriots, suggesting that businesspeople who “dance with” predatory American politicians would be doomed to infamy.

Comments on popular posts about the deal on Chinese social media platform Weibo tend to be more critical than favorable toward Li.

Chief Executive John Lee avoided direct criticism of the deal or Trump, but told reporters on Tuesday his government opposes bullying tactics in international economic and trade relations, reiterating Beijing’s stance.

Some unconfirmed reports have suggested Chinese leaders were angry not to have been consulted in advance about the deal.

George Chen, managing director for Hong Kong at The Asia Group, a Washington-headquartered business and policy consulting firm, said Beijing may have been disappointed because it had almost no time to devise a response in advance.

Ports are valuable strategic assets and transactions involving them are always sensitive, said Wilson Chan, co-founder of the Pagoda Institute, a think tank focusing on public policy and the global political economy.

It is unclear whether pressure from Beijing will affect the deal, which has to be approved by Panama’s government. China’s Foreign Ministry deflected a question about whether authorities are investigating the deal, saying reporters should ask other authorities.