April 3 (Reuters) - BlackRock ( BLK ) could hit another

roadblock in its attempt to secure control of two flagship ports

near the Panama Canal once the Central American country releases

an audit on a 25-year concession granted to Hong Kong-based CK

Hutchison ( CKHUF ).

Final signature of the deal in Panama, part of a broader

$22.8 billion transaction between a BlackRock ( BLK )-led group and CK

Hutchison ( CKHUF ) including over 40 ports in 23 countries, is expected

to be delayed as criticism grows in China, sources told Reuters

last week.

The deal's definitive documentation was initially expected

to be signed by April 2, BlackRock ( BLK ) and CK Hutchison ( CKHUF ) said last

month when they announced the deal.

As China's market regulator begins an antitrust review on

the deal, Panama's government is requesting documents from CK

Hutchison ( CKHUF ), a telecoms-to-retail conglomerate owned by tycoon Li

Ka-shing, to complete an audit on the concession.

Panama's Maritime Authority also asked BlackRock ( BLK ) and CK

Hutchison ( CKHUF ) to provide details of their deal, which must

ultimately be green-lit by Panama.

The deal includes 90% of the Panama Ports Company, which

operates the Balboa and Cristobal ports at either end of the

Panama Canal.

WHAT COULD THE AUDIT FIND?

The Panama ports audit was announced in January by the

Comptroller General office as "the most important" of a series

of reviews of key infrastructure concessions in Panama.

Comptroller general Anel Flores said last week that results are

expected in the coming 'days or weeks.'

Flores has criticized previous audits, including one

completed before CK Hutchison's ( CKHUF ) concession was renewed in 2021,

saying they were limited to confirming the fulfillment of

operational goals.

"We'll begin a severe, strong audit of those books and

company," he said earlier this year.

Flores has also complained about the 'poor yield' of the

contract for Panama and the slow delivery of documents requested

from CK Hutchison ( CKHUF ).

In February, Panama's Attorney General released a binding

opinion finding that the port contract was unconstitutional.

Panama's Supreme Court will have the last word on that.

If the Comptroller General finds irregularities in the

concession renewal or the Supreme Court declares the contract to

be unconstitutional, the concession could be revoked,

complicating the BlackRock-CK Hutchison deal and possibly

creating grounds for international arbitration, lawyers and

experts have said.

WOULD THE DEAL EASE TRUMP'S PRESSURE?

U.S. President Donald Trump has celebrated the BlackRock-CK

Hutchison deal, while China and pro-Beijing voices have

criticized it, thrusting the firms involved and the Panamanian

ports into the fray of the U.S.-China trade war.

However, any hurdles to the deal increase the risk of a

hardening of Trump's policy towards the canal.

Since taking office in January, Trump has escalated his

threats of controlling places he says could better serve U.S.

interests, like the Panama Canal and Greenland.

The ports are not part of the canal. However, American

officials and politicians have said CK Hutchison's ( CKHUF ) control of

them, along with other concessions to Chinese firms in Panama,

represents a security risk for the canal's operation.

CK Hutchison ( CKHUF ) has said the sale of the ports was purely

commercial and unrelated to politics. Panama says the canal is

operating in a fair and secure way, granting equal access to

vessels from all origins.

WHAT IS THE VIEW FROM CHINA?

Pro-Beijing media have published a series of commentaries

criticizing CK Hutchison's ( CKHUF ) deal, depicting it as a betrayal of

China and a "perfect cooperation" with the U.S. strategy to

contain China.

The pressure on CK Hutchison ( CKHUF ) has deepened concerns that Hong

Kong's edge as a financial hub will erode further amid

geopolitical tensions.

WHAT IS IN IT FOR BLACKROCK?

The purchase is in line with BlackRock's ( BLK ) recent investment

drive in infrastructure, and it secures the fund manager a

strong position near an essential global trade hub.

The broader deal including many other ports worldwide could

give BlackRock ( BLK ) control of 10.4% of global container throughput,

making it the world's third largest port operator, Chinese state

media reported.

The deal has also been described as helping BlackRock ( BLK ) and

CEO Larry Fink win political capital with Republicans, who in

some states have restricted or banned BlackRock ( BLK ) from managing

retirement or treasury funds over the company's policies on

environmental, social and corporate governance (ESG) investing.

Some Republicans were reconsidering BlackRock ( BLK ) bans after

Trump praised the deal.