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People's Daily Online>>China Society

Red Cross disbands its commercial branch

(China Daily)

13:32, January 01, 2012

BEIJING - The Red Cross Society of China (RCSC) on Saturday announced the decision to shut down its subordinate organization in the commercial sector as investigation showed that the latter was run in a way that betrayed its non-profit mission by making money through manipulating philanthropy.

The investigation also showed that Guo Meimei, who claimed herself the "commercial general manager" of the Red Cross on her micro blog, had no connection with the charity organization or its branch in the commercial sector. Guo, 20, showed off her lavish lifestyle online and hit a public nerve in June, which plunged the Red Cross into a scandal for abusing the money given for "doing good".

The investigation was jointly conducted by five parties including the Ministry of Supervision, the RCSC and the China General Chamber of Commerce in July. The RCSC released both the investigation results and its statement on its official website following the investigation.

The Red Cross branch in the commercial sector had failed to establish a strict management structure, said the statement, as it had never held general assembly or elected its board of directors by vote as required since it was founded in 2001.

The Red Cross branch in the commercial sector proposed to the society to build 20,000 community-based stations nationwide to provide first-aid services to residents in 2006. Two years later, the project was designed and operated by a private company, and both its major shareholder and deputy general managers took important positions in the Red Cross branch in the commercial sector. The company was entitled to make profits from the charity project. However, the project failed before it was carried out nationwide, according to Chinese media.

The RCSC's statement said this kind of affiliate transaction seriously violated the principle of organizations "dedicated for public welfare" and blamed itself for unsuccessful supervision.

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