TAMWORTH Regional Council has admitted it knew of the Chinese involvement in the Virgin pilot training school proposal for the city's airport.
The deal has been put under the spotlight again after revelations the pilot training school partnering with Virgin, Australian International Aviation College (AIAC), is owned by two Chinese conglomerates with strong ties to the Chinese Communist Party.
Tamworth mayor Col Murray said he was aware AIAC was "90 per cent" owned by the two Chinese companies: HNA Group (80 percent) and Winbright (10 per cent).
"There was never any withholding of who their partners were, they were clearly explained - not at the very start, but certainly early in the discussions," Cr Murray said.
"[Virgin] brought a delegation down to meet with our councillors, including the Chinese partners. So in my view, Virgin never really deliberately withheld information."
In March, six months after the deal had been announced, TRC general manager Paul Bennett told the Leader he had no knowledge of any Chinese involvement in the Virgin Australia pilot training school.
"Council had never heard of Winbright Aviation until the story was published in national media," Mr Bennett said at the time.
"Hainan Airlines [owned by HNA Group] is a part owner of Virgin Australia but we have had no dealings with them."
Some critics claim the $30-million proposal - which would see up to 500 pilots trained a year at the Tamworth airport, most of which would come from overseas - could be a security risk.
The deal will not be officially signed until it has passed the Foreign Investment Review Board, which is currently considering the proposal.
Cr Murray rejected the idea council had rushed in to a decision without doing its due diligence.
"We're not experts in that area, and we don't need to be experts in that area," Cr Murray said.
"We will seek advice and take advice from the Australian Government, who are the experts in dealing with foreign entities, financial implications and security implications.
"We've got every confidence in the Australian Government as to whether this is an appropriate move."
A number of organisations, such as Bank of America refuse to do business with HNA Group, while market regulators have stepped in to stop its involvement in some acquisitions and mergers.
However, Cr Murray said he wasn't concerned by the Chinese company's involvement in the deal.
"We certainly wouldn't have Australia today as we see it, without foreign investment," he said.
"Unfortunately, I don't think we can run our business on what a newspaper might think.
"I think we've got to have a bit more substance to our decision making than that."
A Virgin Australian spokesperson the company was transparent with its dealings with TRC, and that both Chinese and Australian pilots would be trained at the school.