Businessman Yang Tengbo, a suspected spy who befriended Prince Andrew, has been named as a suspect amid controversy at the heart of the government over how to deal with influential Chinese people.
The allegations surrounding Mr Yang focus on the government's plans for the Foreign Interests Register and whether to designate China as an enhanced risk amid Labour's new charm offensive against China.
Security Minister Dan Jarvis said planned security law reforms, which would require those working for foreign governments to declare or face criminal prosecution, would not be ready until summer 2025. His Conservative predecessor Tom Tugendhat, who said MI5 advised on the plan, argued it was pointless unless China was designated as the highest risk.
Mr Yang, who split his time between the UK and China for almost 20 years, ran a Dragon's Den style project in China called Duke of York's Pitch@Palace. He was also authorized to act on the prince's behalf in business transactions in China, according to court documents.
Two former Conservative prime ministers, Theresa May and David Cameron, were also pictured together. Mr. Yang is also known to have met with a number of other politicians, including former Deputy Prime Minister John Prescott.
In a statement, Yang insisted he was not a spy and had “done nothing wrong or illegal” and asked for an anonymity order to be lifted so he could refute the “baseless” allegations against him. requested the high court.
Mr Jarvis told the House of Commons on Monday that the government would set out regulations for the Foreign Influence Register System (FIRS) in the new year and would begin implementing them in summer 2025. He said no decision had yet been made on whether to designate China as an enhanced risk.
Under FIRS, there will be a basic level of declarations called political influence tiers, and an enhanced tier for countries considered to be threats to national security, such as Russia.
Mr Tugendhat told the Guardian that if FIRS had been introduced, Mr Yang would have been subject to it. Conservative MPs speaking in the House of Commons on Monday said they had been told by government officials that the plan was ready and questioned why the government was delaying it. “The advice from MI5 was very clear: If China isn't in the enhanced tier, it's not worth having,” Tugendhat said.
One business source said there was a split between the Home Office, which wants to designate China as a national security threat under the scheme, and the Treasury, which has expressed concerns about the burden on businesses. . “That battle is underway again in Whitehall,” the source said.
Conservative Party sources said Rishi Sunak's government decided to include China in the enhanced framework after similar internal discussions.
“The city was concerned that any transaction would require extensive documentation,” they said. In the spring, it was reported that major banks such as HSBC, Standard Chartered and Prudential, as well as other financial services companies, were lobbying ministers to tone down the plans.
But Conservative Party officials said all departments, including the Treasury, had ultimately reached a decision to include China in the enhanced plan.
Ministers are simultaneously carrying out a cross-Whitehall audit of the UK's relationship with China, with insiders now expecting a conclusion in March.
Mr Yang, 50, former chairman of consulting firm Hampton Group, had lived in the UK for nearly 20 years. He was first stopped by counterterrorism agencies in 2021 and ordered to hand over his equipment.
In February 2023, Mr Yang was “removed” from a flight from Beijing to London, and in March he was barred from the UK. His appeal against this decision was rejected by the Court of Special Appeals for Immigration (SIAC) last week.
The businessman regularly visited the UK and attended a series of events at royal residences, including Andrew's birthday party at Prince Windsor's mansion.
At the hearing, it was reported that Yang was banned because he was believed to be affiliated with China's United Front Work Department, which collects information on powerful people overseas. The ruling said Yang had “downplayed his ties” to the group in his witness statement.
In a statement on Friday, Andrew's office announced that he had ceased all contact with the men he met through “official channels” and “did not discuss any sensitive matters.” The duke will not be attending the royal family's traditional Christmas gathering at Sandringham this year amid controversy.
In a statement, Mr Yang said he was shocked to be removed from the UK and denied he had ever acted against the UK's interests. He said there was a “high degree of speculation and misinformation in the media and elsewhere” and that he was filing an appeal against the decision to exclude him.
“The political climate has changed and unfortunately I have become a victim of it. When relations are good and Chinese investment is sought, I am welcome in the UK. When relations deteriorate, anti-China They took this attitude and I was excluded.”
In ruling on his exclusion from the UK, the judge found that Mr Yang had “enjoyed a significant degree of extraordinary trust from senior members of the royal family who were prepared to enter into business activities with him”.
When searching the businessman's phone, authorities discovered a letter from Prince Andrew's senior adviser Dominic Hampshire from March 2020. The letter mentioned that he had been invited to the prince's birthday party in the same month, and wrote the following: To the top of the tree that many people want to climb. ”
A document was also found on Mr Yang's phone that listed the “key points” of the call with Mr Andrew, which said Mr Yang was “in a desperate situation and would grab anything”.
Guy Vassoul-Adams KC, representing Mr Yang, told the High Court that threats by MPs to name his client were part of the reason he decided to apply for the anonymity order to be lifted.
