The China Youth Development Foundation has launched a fierce counter-attack against allegations Project Hope, managed by the foundation, misused hundreds of millions of yuan of donations in the past decade for speculative investments that led to heavy losses. In a statement on Wednesday night to sina.com, a leading mainland Internet news site, the foundation branded the allegations 'a terrorist attack on the China Youth Development Foundation by vicious criminals aiming to destroy the foundation and Project Hope'. The statement named Yi Xiao as the instigator of the allegations, saying he was a prisoner facing execution for serious economic crimes in the early 1990s but had been released on medical parole. Yi was an employee of the foundation until he was accused of the economic crimes. The statement said Yi made the allegations because he had a personal feud with Xu Yongguang, the founder and legal representative of the foundation. It said Yi had been taken back to jail by the Ministry of Justice to 'prevent further damage'. It also accused Liu Yang, who was an accountant with the foundation for more than a decade, of 'stealing state secrets, manipulating overseas media and blackmailing the China Youth Development Foundation'. The statement posted on sina .com relayed a message from Xu Yongguang, saying donations had been used for various investments but they had been profitable. The statement said the foundation had asked the auditor-general for a special audit to clear the 'false charges'. Ms Liu held a press conference in Guangzhou on Wednesday, during which she claimed she had been followed and had received threatening phone calls since the Hong Kong media first revealed allegations against Project Hope. She pleaded for overseas and Hong Kong media to support an investigation of the allegations of misuse of funds. Ms Liu said reports on the scandal posted on the Internet on the mainland had been removed soon after being was posted.