Hong Kong (AFP) – China's market regulator said it will review Hong Kong conglomerate CK Hutchison's sale of Panama Canal ports to a US-led consortium, a Beijing-backed newspaper in Hong Kong reported on Friday.
The business empire built by Hong Kong billionaire Li Ka-shing offloaded its global ports business outside China -- including operations in the vital Central American canal -- this month to a group led by giant asset manager BlackRock for $19 billion in cash.
The State Administration for Market Regulation was "aware of this transaction and will conduct a review in accordance with the law, to protect fair market competition and public interest", a spokesperson for the regulator said, quoted by Beijing-backed newspaper Ta Kung Pao.
The deal came after weeks of pressure from US President Donald Trump, who refused to rule out military intervention to "take back" the crucial waterway from alleged Chinese control.
The agreement was to be signed by April 2 but it came under fire from two Chinese government offices overseeing Hong Kong affairs, one based in Beijing and the other in the former British colony.
They reposted critical newspaper articles in recent weeks including an op-ed that blasted the move as "betraying and selling out all Chinese people".
On Friday night, those two offices republished the exchange between Ta Kung Pao and the regulator about the review.
The signing of the April 2 deal will now not go ahead as planned, the Hong Kong-based South China Morning Post newspaper reported on Friday, citing "a source close to Hutchison".
The Chinese regulator and CK Hutchison did not immediately respond to an AFP request for comment.
Jet Deng, a senior partner at the Beijing office of law firm Dentons, said China's antitrust laws can be applicable outside its borders, similar to those of the United States and the European Union.
Once a deal meets China's reportability threshold, a declaration is required even if the transaction takes place abroad, as long as the parties involved had substantial operations in mainland China, Deng told AFP before the regulator's announcement.
Firms that fail to declare may be fined for up to 10 percent of their operating income from the preceding year, he added.
CK Hutchison is registered in the Cayman Islands and the assets being sold are all outside China.
Hong Kong leader John Lee said last week that concerns about the sale "deserve serious attention", adding that the city will "handle it in accordance with the law and regulations".
The conglomerate has not publicly responded to criticism of the transaction.