A member of the board of directors of a company with ties to China's Red Cross Society has resigned over his alleged girlfriend's online flaunting of her wealth - an incident that led many people to question whether the charitable organization was involved in the misuse of donated money, Chinese media have reported.
Weng Tao, chief executive of the company, said on his micro blog on sina.com.cn on Sunday that Wang Jun, the alleged boyfriend of the woman at the center of the scandal - 20-year-old Guo Meimei - had resigned on June 26.
Guo had earlier claimed on her micro blog to be the general manager of a company called Red Cross Commerce and had boasted online about her luxurious lifestyle, cars and home.
The Red Cross Society made several announcements on its website distancing itself from Guo after her story broke online and was then picked up by the mainstream media.
The organization said on its website on June 28 that it was not affiliated with an organization called Red Cross Commerce. It also said it did not have an employee named Guo Meimei.
In an interview with Beijing News on Sunday, Weng said he realized Wang was involved with Guo after he saw photos posted online by Guo of a Lamborghini and recognized it as belonging to Wang.
Wang later admitted that Guo was his new girlfriend.
The revelation made Wang unfit to serve on the board because the scandal had hurt the company's credibility, Weng said.
He explained that the company was set up with a 50 million yuan ($7.74 million) investment in 2008 and had signed a contract with China Red Cross and a company called Red Cross of the Commercial Sector to provide residential communities with paramedical, emergency treatment services and fundraising ads for the Red Cross Society.
Weng said the business' biggest shareholder is a company in Shenzhen. Wang, the board member who resigned, holds a 10 percent stake in that Shenzhen company.
Weng said the scandal has led to the company he heads being put up for sale for 70 percent of its value. He said the business has not fared well in recent years.
On July 1, the Red Cross Society announced on its website that Red Cross of the Commercial Sector, an organization that has an independent system and runs financial, human resources and administrative affairs, will have all of its activities halted before going through an audit and investigation process.
Many Internet users were unconvinced about reports that Wang was Guo's boyfriend and still believe she has a family connection at a high level within the Red Cross itself. Some said online that they suspect Wang Jun is a fabrication.
Zhong Hongwu, director of the Corporate Social Responsibility Research Institute under the Chinese Academy of Social Sciences, said the public is now showing greater maturity and is becoming more vocal in standing up for its rights and holding government authorities and public institutions accountable.
Zhong stressed that financial transparency is vital if charities are to earn donors' trust and he said the Red Cross in China has room for improvement.