Chinese charity releases records amid money laundering claims

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".