Panama, under pressure from US President Donald Trump's administration to reduce alleged Chinese influence in the waterway, has accused the firm of failing to meet its contractual obligations and pushed for it to pull out of the country.

A Panamanian audit released Monday said it found "many breaches" of the concession awarded to Panama Ports Company (PPC), a subsidiary of Hong Kong conglomerate CK Hutchison.

PPC denied the finding, saying any suggestion it "has failed to pay approximately $1,200 million balboas ($1.2 billion) to the Panamanian State is absolutely contrary to reality."

Panama has denied US assertions that China exercises undue control over the waterway, but faced with Trump's repeated threats to seize the canal, launched the audit in January.

The United States built the more than century old canal and handed it over to Panama in 1999.

PPC won the concession to operate one port on the Pacific side and another on the Atlantic side in 1997, and then renewed for another 25 years in 2021.

Panama state comptroller Anel Flores concluded that Panama did not receive $1.2 billion it was owed under the contract, adding that PPC benefited from many tax exemptions and had irregularities in a previous audit.

But the company said on Wednesday that it has more than met its contractual obligations, having made "significant investments that exceed $1,695 million balboas" -- which it said was confirmed by authorities in a 2020 audit.

"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."

The statement came as US Defense Secretary Pete Hegseth visits Panama for a regional security summit and to reinforce the Trump administration's continued interest over the canal.

On Tuesday, during a visit to the canal, he said that the United States would not allow China to "threaten" the operations of the waterway.

The United States has said it is a threat to its national security -- and the region as a whole -- for a Hong Kong company to operate the Panama ports, through which five percent of all global shipping passes.

At the regional security summit on Wednesday, Hegseth said the United States does not seek war with China but will act to deter what it considers threats from the Asian giant.

"Together, we must prevent war by robustly and vigorously deterring China's threats in this hemisphere," he said.

PPC on Wednesday defended its contributions to Panama, saying it had paid the state $668 million balboas during the concession term, "far exceeding" any other port operator.

"The PPC extension of the concession contract is valid, in force, and compliant with all legal requirements," the company added.

CK Hutchison last month announced a deal to offload 43 ports in 23 countries -- including its two on the interoceanic Panama Canal -- to a consortium led by US asset manager BlackRock for $19 billion in cash.

A furious Beijing has since announced an antitrust review of the deal.

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