Businessman quits amid China Red Cross scandal

Workers of the Hainan Red Cross hold collection boxes during a fundraising event for tsunami relief on January 11, 2005 in Haikou, China
Image caption The Red Cross is often allowed to lead aid efforts in China

A businessman on the board of a company with ties to China's Red Cross Society has resigned amid a charity scandal.

Wang Jun quit after his girlfriend was accused of using charity money to fund a lavish lifestyle, state media said.

Guo Meimei, 20, claimed on her blog to be the "commerce general manager" of the Red Cross and boasted about her purchases of luxury cars and handbags.

The Red Cross has dismissed the claims as "pure fantasy" and said Ms Guo had no connection to the charity.

The charity's spokesman Martin Faller said the stories that first circulated online about the possible misuse of donated money had no substance.

But he said it was important for the Red Cross to use the current situation "to become even better", the state-run China Daily quoted him as saying.

Damaged reputation

Guo Meimei uploaded photographs of herself next to a luxury car on her blog last month, raising questions about how she was funding such a lavish lifestyle.

A few days later the 20-year-old's boyfriend, Mr Wang, resigned from his post at China Red Cross Bo'ai Asset Management Ltd, a commercial company that organises charity activities on behalf of the Society.

The head of the company, Weng Tao, blogged on Monday that Ms Guo was not a manager at Bo'ai or at the Red Cross, and that her luxury items had been gifts from her partner.

The revelation made Mr Wang unfit to serve on the board because the scandal had hurt the company's credibility, Mr Weng told the China Daily.

The Red Cross Society has made several announcements on its website distancing itself from Ms Guo since the story broke online and was picked up by the mainstream Chinese media.

The scandal raised questions about corruption in the Red Cross and other charities in China, including those run by the state.

The government places the Red Cross in the lead of charity drives during disasters, and it is one of the few charities generally allowed to solicit public donations.

An editorial in the China Daily said a lack of transparency in the use of charity donations has long been a matter of concern to the public.

It said in April, the Red Cross' Shanghai branch spent nearly 10,000 yuan (£960; $1,547) on a dinner for just 17 people, which caused widespread public anger when the bill was posted online.

"The charity needs to first conduct an investigation into the entire incident and then tell the public what its commercial organisation has done, whether it has made profits and how the profits, if any, have been used," the editorial said.

"Then it needs to think hard about how it can rebuild its credibility."

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