King welcomed Chinese financier deemed security risk by Nato ally to Scottish country estate

The King reportedly welcomed a Chinese financier for President Xi to a private black tie dinner in Scotland whose work was later deemed a national security risk by a Nato member state.

Charles met with Kenny Song, who works for Xi’s Belt and Road Initiative, after courtiers were told the Beijing-based businessman could invest in the King’s failed eco-village, Knockroon, which had once been billed as “a model community for Scotland”.

The King welcomed Song to Dumfries House, his country estate in south-west Scotland, for dinner in late 2018.

King Charles in the grounds of Dumfries House in Cumnock. | PA

It is understood a deal was proposed that would see Song invest in the nearby village, a development set up to help repay a £20 million loan that Charles’s charity, the King’s Foundation, took out to buy the 18th-century estate.

Just 31 out of 770 planned homes were built at Knockroon, in Cumnock, South Ayrshire, due to a lack of demand, with the development remaining a ghost town. It means Charles has had to fundraise privately to settle the charity’s debts.

Sources, quoted in The Times, claimed Song said he could help facilitate the construction of cheap modular homes by Chinese state-owned corporations.

Part of the King's Foundation, Dumfries House is a stunning 18th century house and estate in Ayrshire. | Carole - stock.adobe.com

The deal, however, fell through soon after Song attended the dinner, it was reported. He said he had a friendly conversation with the King, but that a lack of potential buyers for the homes meant the proposal was never commercially viable. It was also reported he was never prepared to give to the King’s charity on purely a charitable basis.

A spokesperson for the King’s Foundation said there was no commercial relationship between the two, adding: “It would be false to suggest any donation was ever made or offered by Mr. Song to the former Prince's Foundation.”

A source with royal links, however, claimed that both parties’ lawyers had entered talks and were drafting a memorandum of understanding, only for Song to “disappear”.

They also said Charles’s aides became concerned about the financier’s links to the People’s Republic, though it was unclear if this was before or after the deal failed.

At the time of the talks, Song was behind plans for Chinese state-owned enterprises to build the world’s longest tunnel, linking Tallinn and Helsinki, the capitals of Estonia and Finland, under the Baltic Sea. Song had pledged to raise €15 billion [£12.5bn] for the tunnel, saying it would create a “centre of gravity connecting Asia and Europe”.

He described his company, Touchstone Capital, as a “platform” for Belt and Road - Xi’s signature foreign policy initiative, which Theresa May, who was then the prime minister, had refused to endorse amid concerns about Chinese foreign influence.

The plan was also snubbed by other countries, with Estonia blocking the scheme, citing security and economic concerns, among others. Its intelligence service said Belt and Road was designed to cement China’s status as a “global superpower”, and specifically detailed Song’s business activities and apparent links to Chinese state-owned firms.

A Finnish minister said this year the project was “unrealistic” and no longer a priority.

A Palace source said Charles and Song did not have a one-on-one meeting, pointing out that dinners at Dumfries House often include 50 guests and that it would be false to suggest the two had any relationship. They added they do not comment on matters of national security.

Officials have reportedly not responded to questions over what measures were taken before or after Song’s visit to Dumfries House.

The Times said it is understood Charles met Song after conversations brokered by Michael Fawcett, his former valet, who ran the Prince’s Foundation.

After realising the charity expected a donation, and did not have any buyers for the proposed properties, Song reportedly claimed he told the King’s team: “Sorry, I cannot do anything.”

The disclosure comes just days after the Duke of York was found to have built a close personal relationship with Yang Tengbo, an alleged Chinese spy.