Red Cross to probe alleged misuse of donations

Xinhua, July 3, 2011

The Red Cross Society of China has announced that it will suspend operations in one of its fundraising groups and hire auditors to investigate the branch's alleged misuse of donations.

According to a statement posted on the charity's official website late Friday, the charity will invite auditing institutions to check revenues and expenditures for the China Business System, a group founded in 2000 by the China General Chamber of Commerce with the approval of the Red Cross Society.

The China Business System primarily engages in charity fundraising in China's commercial sector, as well as organizing emergency relief efforts. Funds raised by the group are channeled directly to the Red Cross Society.

The charity will also ask the China General Chamber of Commerce to set up an investigatory committee to probe the group and investigate claims of misused funds.

The Red Cross Society said in its statement that while it does supervise the group's work, it is not involved in the group's internal administration or accounting affairs.

The group faced accusations of misused donations after a 20-year-old woman calling herself "Guo Meimei" online posted photos on her microblog detailing her lavish lifestyle. The woman claimed to be the general manager of "Red Cross Commerce."