‘Spy’ founded Prince Andrew’s Chinese money-making scheme

An alleged Chinese spy was unmasked on Monday as the founder of the Duke of York’s money-making venture in China.

Yang Tengbo was named as the suspected foreign agent at the heart of the spy scandal after a court order giving him anonymity was lifted.

The Chinese businessman, who has mixed with figures from across the British establishment, was a founding member of the Duke’s venture Pitch@Palace China.

The Duke is understood to have benefited financially from the scheme thanks to a clause that allowed him to take a 2 per cent cut of investment deals.

The revelation puts pressure on the Duke to reveal how much he earned from the Dragons’ Den-style partnership and whether any other money changed hands.

Earlier this year it emerged that he now privately funds his home and security, but the source of the funding is not known.

Richard Tice, the Reform deputy leader, said: “Anyone who earned commission or profits from dealing with an alleged Chinese spy needs to come clean to prevent more concerns over a massive cover-up.”

The Duke will not join the Royal family for Christmas at Sandringham after he was urged to “do the decent thing” and maintain a low profile to avoid causing further embarrassment to the King.

Both the Duke and his ex-wife, the Duchess of York, will avoid the family gathering, The Telegraph understands.

The decision was made easier because neither Princess Beatrice nor Princess Eugenie, their children, were expected to spend Christmas at Sandringham this year.

Yang’s identity was revealed after pressure from MPs during a major row over the anonymity order.

Sir Iain Duncan Smith, former Tory leader, had criticised the order and Mr Tice had said he would name Yang in the House of Commons, using parliamentary privilege, if he was not unmasked.

But on Monday, Guy Vassall-Adams KC, Yang’s barrister, said his client wished to set aside the order and the High Court ruled that he could be named.

In a statement issued after the order was lifted, Yang denied allegations that he was a spy and insisted that he loved the UK “as my second home”.

He said: “Due to the high level of speculation and misreporting in the media and elsewhere, I have asked my legal team to disclose my identity. I have done nothing wrong or unlawful and the concerns raised by the Home Office against me are ill-founded.

“The widespread description of me as a ‘spy’ is entirely untrue. The political climate has changed, and unfortunately, I have fallen victim to this.”

Yang added: “When relations are good, and Chinese investment is sought, I am welcome in the UK. When relations sour, an anti-China stance is taken, and I am excluded.

“I built my private life in the UK over two decades and love the country as my second home. I would never do anything to harm the interests of the UK.”

Yang, 50 – who was banned from entering Britain on national security grounds – can be revealed to be behind Hampton Group International, a lobbying firm with extensive links to China.

Until now, the firm and the businessman had gone largely unnoticed. But its alleged web of influence, which spans Beijing, Westminster and royal palaces, can now be fully disclosed.

Yang worked as a junior civil servant in China before moving to York in 2003. There, his English language skills improved rapidly and he graduated with a master’s degree in public administration, according to a BBC profile.

In 2005, Yang established a strategy advisory company to help company bosses in Beijing to network internationally.

The Chinese national, who began using the anglicised name Chris Yang, was a central figure in arranging the first UK-China Business Leaders’ Summit, where he was seen with George Osborne, the chancellor at the time.

He appears to have first become linked to the Duke through Pitch@Palace, the Dragons’ Den-style initiative the Duke began in 2014, three years after being forced to step back as trade envoy.

The scheme, designed to attract investment for budding entrepreneurs, allowed the Duke to plough on with one of his favourite pastimes, using the royal brand to develop business deals and relationships.

When Pitch@Palace China was launched in 2016, it was hailed as a platform for driving China-UK co-operation during a “golden era” of relations between the two countries

The alleged spy spoke publicly about this fortuitous development a few months later, saying that “through a very unexpected opportunity, a Prince entrusted us with bringing this project to China”.

While the UK-based operation of Pitch@Palace was a non-profit-making company, the overseas arm Pitch@Palace Global was owned by the Duke himself and was set up to make profits by brokering deals between tech start-ups and wealthy investors.

Terms and conditions for Pitch@Palace Global showed the company – of which the Duke was the “significant” controller – was entitled to a 2 per cent share of any investment deal for three years.

In 2017, Xia Hua, the executive vice-chairman of Pitch@Palace China, said it had started a 10 billion yuan (£1 billion) venture fund for selected startups.

Yang would also go on to help broker the Chinese expansion plans of Gordonstoun, the Duke’s former school. The school signed a deal with Hampton Group International to open campuses in China.

After The Telegraph revealed the deal, Gordonstoun, a boarding school in Scotland also attended by the King, announced it had terminated its partnership with the Hampton Group.

Details about the Duke’s relationship with Yang have raised serious questions about how he funds a lavish lifestyle that includes the upkeep of Royal Lodge, his 30-room home at Windsor, which needs extensive repairs.

The maintenance costs, as well as his private security bill, are thought to add up to millions of pounds a year.

Earlier this year, the King cut off his funding for the Duke, in the hope it would encourage him to move into a less expensive property.

But it then emerged the Duke had the funds to pay for the upkeep and security himself. The source of those funds has never been revealed.

Family’s £1.4m payment

Concern about Yang’s involvement in Pitch@Palace is not the first time the venture has been under scrutiny.

Selman Turk, who is accused of stealing more than £40 million from a Turkish heiress, was jailed for 12 months for contempt of court earlier this year after he failed to produce evidence despite being ordered by a judge to do so.

The Duke and Duchess of York, as well as their daughters, received £1.4 million that the former Goldman Sachs banker is said to have taken from Nebahat Evyap Isbilen.

The nature of the relationship between the royal figures and Mr Turk, or the reason he gave them money, remains unclear. The payments were made just before and after Mr Turk won a Pitch@Palace event run by the Duke.

Mr Turk, 37, denies fraud and a trial is due to take place over the missing money.

After Yang’s identity was revealed, it emerged that an organisation with hallmarks of Chinese government influence lauded his access to two British prime ministers.

Photographs of Yang alongside Lord Cameron and Baroness May were featured as evidence of his influence when he was presented with an award in 2019, according to Radio Free Asia.

The organisation also reported that Yang told the Chinese state broadcaster that meeting Lord Cameron at Downing Street had been a turning point in his career.

David Lammy, the Foreign Secretary, said the scandal was a “serious matter”. He added: “I welcome the court’s decision to uphold the Home Office’s position on Yang’s exclusion and where individuals pose a threat. As you would expect, the UK Government is absolutely committed to using the full range of powers available to disrupt them.

“We recognise the threat, we raised it with the Chinese government and we will act wherever needed.”

The Duke said he had “ceased all contact” with Yang when the Government first raised concerns about him.