Charity foundation probed over embezzlement accusation

A staff member of a charity foundation confirmed on Monday that a third party audit is under way to address accusations of embezzlement involving millions in donated money.

Qi Xin with the publicity department of Smile Angel Foundation (SAF) told Xinhua in a phone interview that a third party auditor was hired by the SAF's supervisor, the Chinese Red Cross Foundation, to investigate the matter in February.

The investigation is also part of Chinese Civil Affairs Minister Li Liguo's promise that authorities will give a full and concrete response to the public about accusations that the foundation broke the law.

Li made the remarks on Sunday during the ongoing second session of the 12th National People's Congress (NPC).

Initiated in November 2006, the SAF is one of the most popular charity groups in China, especially among celebrities.

According to an audit report published on the SAF website, the foundation had received more than 130 million yuan (21.2 million US dollars) in donations by the end of 2012.

Since last December, Zhou Xiaoyun, a former investigative reporter and web celebrity, has accused SAF and its founder, celebrity-turned-philanthropist Li Yapeng, of embezzling donated money and accumulating wealth through unfair means.

SAF later issued a statement questioning Zhou's credibility and accused him of misleading the public.

The reputation of charity groups, especially the Red Cross Society of China, took a major hit in 2011 when a woman calling herself Guo Meimei used social media to claim she managed an organization under the charity and openly flaunted her wealth and extravagant lifestyle.

The incident has triggered public concern about embezzlement and improper management within charities.