HONG KONG (AP) — A subsidiary of a Hong Kong conglomerate that is embroiled in U.S.-China tensions over its Panama Canal port assets denied allegations Wednesday that it had failed to pay about $1.2 billion to the Central American country.

Panama’s comptroller authority announced on Monday that an audit of Panama Ports Company found irregularities in the renewal of a 25-year port concession in the interoceanic canal. The authority's accusations came the same day as U.S. Defense Secretary Pete Hegseth's arrival in the country to participate in a security conference.

The Panama Ports Company, or PPC, defended itself in a statement Wednesday, saying it had made significant investments that exceeded $1.69 billion, surpassing the $50 million investment required under the original concession contract signed in 1997. That was also more than another $1 billion agreed to in an addendum. It said the investments were confirmed by the country's comptroller general in 2020 after a thorough audit.

The company said any statement about what it should have paid under the original concession contract must take into account the respective addenda, which was validly executed and approved by law.

“To express the opposite, as it unfortunately has been the case, not only distorts the reality of the existing legal relationship between PPC and the State under the concession contract and its addenda, but also contradicts the State’s own acts over the years,” it said, referring to Panama.

It said any claim that the company has failed to pay about $1.2 billion to Panama is false and that it believes “respect for legal certainty gives companies and investors the certainty that Panama is a safe country in which to invest.”

Panama Ports Company, under Hong Kong-based CK Hutchison Holdings, won a concession to operate the ports of Balboa, in the Pacific, and Cristobal, in the Atlantic, beginning in 1997 and it was renewed in 2021 for 25 more years. CK Hutchison is controlled by the family of Li Ka-shing, the southern Chinese city’s richest man.

U.S. President Donald Trump has alleged Chinese interference with the critical shipping lane’s operations — accusations that Panamanian authorities have denied. Hegseth said Tuesday that the U.S. will not allow China or any other country to threaten the canal’s operation.

Last month, CK Hutchison announced a tentative deal to sell its canal port assets to a consortium that includes U.S. investment firm BlackRock Inc., which pleased Trump but angered Beijing. China’s Hong Kong affairs offices have posted scathing commentaries from a local state-backed media outlet over the tentative deal.

Chinese anti-monopoly authorities said they would review the business agreement, a state-backed news outlet reported last month. It is unclear how the geopolitical pressure might affect the deal. But analysts have warned that a cancellation could cause the Trump administration to impose more sanctions or restrictions on businesses and individuals in Hong Kong and mainland China.

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