Erik Prince had 'no knowledge' of training agreement in China's Xinjiang: spokesman

(Corrects value of investment to 40 million yuan from 4 million yuan in paragraph 13 of this Feb. 1 story.)

BEIJING (Reuters) - Former U.S. military contractor Erik Prince had “no knowledge or involvement” in a preliminary memorandum signed by a Hong Kong-listed company to build a training base in China’s far western region of Xinjiang, his spokesman said on Friday.

Xinjiang is a major part of China’s Belt and Road infrastructure network but the region has faced attacks blamed on members of the Muslim ethnic Uighur minority. Beijing has responded with a security clampdown condemned by rights groups and Western governments.

Frontier Services Group (FSG), a Hong Kong-listed company founded by Prince, said in a Chinese-language statement posted on its website on Jan. 22 that it had signed a deal to build a training centre in southern Xinjiang.

Reuters reported on the statement on Thursday.

A Prince spokesman told Reuters on Friday that Prince had “no knowledge or involvement whatsoever with this preliminary memorandum regarding the company’s activity in Xinjiang.”

“Any potential investment of this nature would require the knowledge and input of each FSG Board member and a formal Board resolution,” the spokesman said in an email.

Prince is deputy chairman, a minority shareholder and a board member of FSG, a security, logistics and insurance provider.

The former U.S. Navy SEAL officer is the brother of U.S. Secretary of Education Betsy DeVos. He founded the U.S. military contractor formerly called Blackwater that drew international scrutiny and faced lawsuits for shootings and other conduct in Iraq. It now operates as Virginia-based Academi.

A Hong Kong-based spokesman for FSG told Reuters on Friday that the statement was “published in error by a staff member in Beijing” and had been taken off FSG’s website.

The removed statement had said that FSG signed a deal with the Kashgar Caohu industrial park in Tumxuk city in southern Xinjiang to build a training centre.

The Tumxuk government did not answer a phone call seeking comment on Friday.

The statement did not provide details but said a signing ceremony in Beijing on Jan. 11 was attended by officials from Tumxuk city and CITIC Guoan Construction, owned by state-run conglomerate CITIC Group, which took a controlling stake in FSG last March.

A state media report had said FSG would invest 40 million yuan ($6 million) in the centre, which will have the capacity to train 8,000 people a year.

In a March 2018 stock exchange filing, FSG said that it intends to set up a “secured logistics business” in Pakistan and Xinjiang.

In May 2017, it acquired a 25 percent stake in a security training facility in Beijing, which it said was the largest such school in China and would allow FSG to provide “world-class training courses” to Chinese companies.

Hundreds of thousands of Uighurs and other Muslims have been detained in the security clampdown in Xinjiang.

China has defended the measures as “de-radicalisation” that has prevented violence by providing vocational training to people susceptible to “extremist” thought.

Reporting by Christian Shepherd; Editing by Tony Munroe and Darren Schuettler