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Charity's statue raises eyebrows

PUBLISHED : Sunday, 13 November, 2011, 12:00am
UPDATED : Sunday, 13 November, 2011, 12:00am

A regional branch of the mainland's third-biggest charity group is again under scrutiny, this time over a controversial giant statue of Sun Yat-sen's wife being built in Henan province.

The 24-metre statue of Soong Ching-ling in Zhengzhou is nearly complete - and it cost the provincial arm of the China Soong Ching Ling Foundation, which says it focuses mainly on projects to help children, some 400million yuan (HK$488 million).

Questions are being asked as to why the charity commissioned the statue in the first place - and where the money came from.

Xinhua reported yesterday that the charity's Henan branch had diverted medical insurance contributions for rural health care into property market investments or loans to generate income on the interest.

The reputation of mainland charity organisations was already in tatters after a string of scandals - including those involving the Red Cross Society of China - that have prompted calls for transparency over how quasi-official agencies manage their cash.

In September, after claims the Henan charity is profiting by lending out millions of yuan in donations, the National Audit Office sent a task force to investigate.

This time the charity is under scrutiny over reports that it fully funded the Soong statue.

Xinhua reported that it received one billion yuan in donations last year but spent only 139 million yuan on public services in that time.

No one from the provincial arm of the charity would speak to Xinhua, but reporters found that a number of its subsidiaries were involved in real estate, insurance and loans businesses.

One agent selling the foundation's medical insurance in Luohe city told Xinhua that farmers had been promised an annual 400 yuan return for every 10,000 yuan they deposited. A village in the area had collected 1.8 million yuan from farmers in a year, the agent said.

The provincial government also began investigating the foundation last month over media reports about a luxury-apartment project and loans to several unnamed companies, the China News Service reported.

The latest scandal also prompted party mouthpiece People's Daily to run a commentary on Thursday calling for boundaries between charities and business, and saying charities should spend income only on philanthropy.

Professor Tao Chuanjin at Beijing Normal University's School of Social Development and Public Policy said the public and media were more effective in scrutinising charities than any government monitoring.

600m yuan

The amount, in yuan, of donations the Henan branch received in 2009. It spent only 140 million yuan on charity projects that year