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  • Nov 1, 2014
  • Updated: 1:12pm
NewsChina
FINANCE

Chinese charity releases records amid money laundering claims

Children's foundation releases records on '4.84 billion yuan' splurge amid laundering claims, but public says explanation does not add up

PUBLISHED : Wednesday, 12 December, 2012, 12:00am
UPDATED : Wednesday, 12 December, 2012, 4:33am
 

A public charitable foundation released details of its 2011 financial records yesterday in answer to accusations of laundering billions of yuan, but many internet users remained sceptical.

After combing through the records, a whistle-blower made a blog and microblog post on Monday accusing the China Charities Aid Foundation for Children, which operates under the Ministry of Civil Affairs, of failing to provide details about a 4.84 billion yuan (HK$5.96 billion) expenditure listed in the records.

In the foundation's financial statement, which online commentator Zhou Xiaoyun said he obtained through official government channels, the spending was listed simply as "other expenditures related to business activities".

The charity issued an apology that day, blaming accounting staff for making a "serious mistake" by adding a zero to the number, which should have been 484 million yuan. And the group said that 475 million yuan of that total was injected into a wealth-investment product purchased from the Bank of China.

In his blog, Zhou pointed out that the foundation said it spent just over 40 million yuan in donations last year, but no details were given about the 4.84 billion yuan also mentioned in the statement for other business activities.

In its apology, the organisation said the bulk of the 484 million yuan was invested in the wealth-management product in order to "increase income, provide better aid and reduce the spending of donations on business activities".

The explanation was widely ridiculed online, so the foundation released a copy of the detailed accounts. However, criticism persisted, with many people accusing the company of falsifying the records and calling for it to release original bank statements.

"For one thing, there's no official seal; for another, there's no report from an independent auditor. Are you kidding us?" one Sina.com microblog user wrote.

Another microblogger wrote: "Even if it were truly a mistake - with 45 million yuan spent on donations while other expenditures accounted for 484 million yuan - it was still spending much less on donations than on the 'others'. What activities on earth cost 484 million yuan?"

According to Zhou, the audit report was just three pages long and not one word touched upon details about the "4.8 billion yuan". He also said the audit lacked supporting documents.

The incident has once again cast a pall over charity groups, after a debacle last year involving the Red Cross Society of China, which came under fire after a woman who claimed to be its "commercial general manager" posted pictures of her luxury cars and designer handbags.

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