Red Cross calls in the auditors

Shanghai Daily, July 2, 2011

The Red Cross Society of China announced on Friday that it is to suspend operations of its Business System branch and invite auditing institutions to check the financial receipts and expenditures.

In a statement published by the humanitarian charity on its website, it said it will ask China General Chamber of Commerce to set up an investigation team to probe the Business System under China's Red Cross, which has been at the center of a series of scandals.

The Business System will be suspended until the audit report and investigation results are made public.

The charity has faced accusations of misuse of donations since 20-year-old Guo Meimei claimed to be general manager of "Red Cross Commerce" and boasted online of her lavish lifestyle.

Though the organization denied existence of Red Cross Commerce, it said there may be confusion with the Red Cross Society of China's Business System - established in 2000 to help run charity projects.

Further probing by web users and media into the Business System raised more doubts over its operations, with many claiming it made huge illegal profits under the guise of charity.

In the statement, the Red Cross Society said the Business System is affiliated to the organization, but the society didn't manage its administrative, human resources and financial operations.