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Businessman in Chinese Charity Scandal Resigns
By EDWARD WONG|
Published: July 4, 2011
BEIJING — A businessman on the board of a company with ties to the Red Cross Society of China has resigned after a nationwide scandal centered on his girlfriend raised questions about corruption in that and other state-run charities, according to an Internet post on Monday by a colleague of the businessman.
The businessman, Wang Jun, left the China Red Cross Bo’ai Asset Management Ltd. Corp., a for-profit company, days after Chinese Internet users accused his girlfriend, Guo Meimei, 20, of using charity money to finance a lavish lifestyle, including purchases of a Maserati, a Lamborghini and Hermès handbags.
The scandal started on June 21, when questions were raised about photographs flaunting her lifestyle that Ms. Guo had uploaded to her microblog, where she also identified her job as “commercial general manager” at the Red Cross.
The scrutiny prompted widespread condemnation and a police investigation of Ms. Guo. Chinese netizens spent days trying to figure out how she had amassed her wealth.
On Monday, the chief executive of the Bo’ai Asset Management company, Weng Tao, said on his microblog that Ms. Guo was not a manager at Bo’ai or at the Red Cross, and that her luxury items had been gifts from Mr. Wang. He said that Mr. Wang had resigned on June 26 Mr. Weng said he did not initially know of Mr. Wang’s relationship with Ms. Guo, which apparently began this winter.
The company is tied to the Red Cross of the Commercial Sector, itself ia shadowy group that is linked to the Red Cross Society of China, a large government organization that is the biggest charity in the country and is a member of the International Federation of Red Cross Societies.
Mr. Weng said his company makes a small profit but focuses on social welfare. It sells advertising on the sides of cars, he said in an interview with Beijing News that was published Monday. Mr. Weng did not give details about the social welfare work done by the company.
The outrage over Ms. Guo has led many Chinese to discuss common accusations of corruption in the Red Cross, which the government favors over private foundations and charities. The government places the Red Cross at the forefront of charity drives during times of disaster, and it is one of the very few charity groups generally allowed to solicit public donations. The National Audit Office reported financial irregularities at the Red Cross on June 26, including that it had overpaid an equipment procurement contract by $650,000. In April, a $1,500 restaurant bill paid for by employees of the Shanghai branch of the Red Cross drew widespread criticism after a photograph of the bill was posted on the Internet.
On Monday, Chinese netizens added to their discussion of the Guo scandal new questions about so-called social welfare housing that is being built in at least three cities by the general Red Cross or the Red Cross of the Commercial Sector. Some people have criticized the homes as too opulent, and have asked whether they are in fact as luxury units meant to be rented or sold for an enormous profit.
Adam Century and Shi Da contributed research.