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By Clare Jim
HONG KONG (Reuters) -CK Hutchison's shares fell on Friday after it reported weak earnings and dividends, while pro-Beijing newspaper published a fresh editorial saying the firm's controversial port sale could potentially violate Hong Kong's national security laws.
The telecoms-to-retail conglomerate , owned by billionaire Li Ka-shing, has been caught in China's crosshairs in the highly politicised deal with a BlackRock consortium, which includes selling assets near the strategically important Panama Canal. The deal is expected to garner the firm more than $19 billion in cash.
U.S. President Donald Trump has hailed the deal after previously calling for the Panama Canal to be removed from what he said was Chinese control.
In its latest editorial on Friday urging the transaction to be scrapped, the pro-Beijing Hong Kong newspaper Ta Kung Pao said the deal is a "perfect cooperation" with the U.S.' strategy to contain China, and it would cause endless harm to China's economy and national interests.
It added the U.S. is trying to control key ports in order to influence the global logistics network and put pressure on China's trade and supply chain.
"The highest principle of the policy of 'one country, two systems' is to safeguard national sovereignty, security and development interests (which) was written into Hong Kong law last year and became a legally binding provision," said the editorial.
"From this perspective, the consequence of this transaction is that it would endanger national security and development interests, directly violating that principle provision."
Hong Kong last year passed a new national security law, known as Article 23, despite concerns from Western governments that freedoms would be further undermined in the financial hub.
Since its return from British to Chinese rule in 1997, Beijing promised the city a high degree of autonomy under a so-called "one country, two systems" model of governance.
The city's security bureau and CK Hutchison did not immediately respond to Reuters' request for comment on the editorial.
Ta Kung Pao had already published two commentaries last week criticising CK Hutchison and said the sale was a betrayal of China that neglected national interests. China's Hong Kong and Macau Affairs Office, a top body overseeing Hong Kong affairs, reposted both commentaries.
Shares of CK Hutchison closed down 3.6%, versus a 2.2% decline in the main Hang Seng Index.
In CK Hutchison's earnings statement on Thursday, it made no mention of the ports deal, although it said "geopolitical and trade tensions have ... risen significantly."
"The operating environment for the Group's businesses is expected to be both volatile and unpredictable," it said in the statement.
It added that it will constrain capital spending and new investment and focus on stringent cash flow management.
Underlying profit for the group slid 11% to HK$20.8 billion ($2.7 billion) last year, slightly short of expectations.
Its final dividend was cut to HK$1.514 per share from HK$1.775 for 2023.
(Reporting by Clare Jim; Additional reporting by James Pomfret and Donny Kwok; Editing by Edwina Gibbs, James Pomfret and Kim Coghill)
