Red Cross shuts down branch over 'chaotic management'
By Xu Chi |
January 1, 2012, Sunday
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Print Edition
Print Edition
THE Red Cross Society of China said yesterday it shut down its Business System branch due to "chaotic management" and "severe violations" as a long awaited investigation report was published after the charity became embroiled in scandal.
The charity said the investigation found it had no relationship with Guo Meimei, a 20-year-old woman who sparked the scandal when she claimed to be general manager of "Red Cross Commerce" while boasting about her lavish lifestyle online.
In June, Guo flaunted her wealth by posting photos of her Maserati and a dozen Hermes handbags on the microblog Weibo.com. She had claimed she was the "general manager of Red Cross Commerce."
This caused a crisis of confidence in the China Red Cross Society as many people accused it of misusing donations. In response, the organization denied the existence of Red Cross Commerce, adding that there may be some confusion with the Red Cross Society of China's Business System, which was established in 2001 to help run charity projects.
On July 1, the organization announced the suspension of all operations of its Business System branch and invited auditing institutions to check its financial receipts and expenditures.
The investigation, carried out by the Ministry of Supervision, Chinese Academy of Social Sciences, China General Chamber of Commerce and other institutions, published the results yesterday.
The investigation found that Guo had nothing to do with the charity organization and that Red Cross Commerce never existed.
But the Red Cross Society of China's Business System had chaotic management since it was established in 2001 as it did not have a legal board of directors or strict regulations, the report said.
Business System severely violated the charity's rules and principles as a business relationship had been found with privately owned company Wangding Marketing and Consulting Co in a charity project, the report found. Wangding officials were found listed as the vice director and vice secretary general of Business System, a violation of the charity's rules, according to the report.
But the report said the Red Cross Society of China had not given any money to Business System.
The report concluded that the Red Cross Society of China poorly supervised Business System and suggested it establish a transparent platform to restore public confidence in its charity works.
The Red Cross Society of China said on its official website yesterday that its Business System branch had been shut down after the report was published. It also promised to establish an online charity information platform before the end of 2012.
The charity said the investigation found it had no relationship with Guo Meimei, a 20-year-old woman who sparked the scandal when she claimed to be general manager of "Red Cross Commerce" while boasting about her lavish lifestyle online.
In June, Guo flaunted her wealth by posting photos of her Maserati and a dozen Hermes handbags on the microblog Weibo.com. She had claimed she was the "general manager of Red Cross Commerce."
This caused a crisis of confidence in the China Red Cross Society as many people accused it of misusing donations. In response, the organization denied the existence of Red Cross Commerce, adding that there may be some confusion with the Red Cross Society of China's Business System, which was established in 2001 to help run charity projects.
On July 1, the organization announced the suspension of all operations of its Business System branch and invited auditing institutions to check its financial receipts and expenditures.
The investigation, carried out by the Ministry of Supervision, Chinese Academy of Social Sciences, China General Chamber of Commerce and other institutions, published the results yesterday.
The investigation found that Guo had nothing to do with the charity organization and that Red Cross Commerce never existed.
But the Red Cross Society of China's Business System had chaotic management since it was established in 2001 as it did not have a legal board of directors or strict regulations, the report said.
Business System severely violated the charity's rules and principles as a business relationship had been found with privately owned company Wangding Marketing and Consulting Co in a charity project, the report found. Wangding officials were found listed as the vice director and vice secretary general of Business System, a violation of the charity's rules, according to the report.
But the report said the Red Cross Society of China had not given any money to Business System.
The report concluded that the Red Cross Society of China poorly supervised Business System and suggested it establish a transparent platform to restore public confidence in its charity works.
The Red Cross Society of China said on its official website yesterday that its Business System branch had been shut down after the report was published. It also promised to establish an online charity information platform before the end of 2012.
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