A major charity organization has denied accusations that it asked a donor to pay extra money before it would issue an invoice for tax deductions.

Shi Zhengrong, the President of Suntech Power Holdings in Wuxi, Jiangsu province.[File photo]

China Charity Federation on Wednesday released a statement on its website insisting the donation in question - 50,000 yuan (US$7,800) from Beijing Chuangxinzhongyi - was to cover administration costs.

Chuangxinzhongyi's parent company, Suntech Power Holdings, a solar energy firm in Wuxi, Jiangsu province, received an invoice in April this year for a promised donation of goods worth 15 million yuan. Regulations state companies that donate money or goods to charitable funds can enjoy tax cuts, but they need an invoice as proof.

Luo Fanhua, a former employee of the Copyright Society of China, accused the federation of selling the invoices.

China Daily was unable to contact Luo. However, a Beijing Times report quoted him as saying: "(You) have to donate the extra money to China Charity Federation in cash, which is an unwritten rule. Once they get it, the federation will not strictly check whether the promised donation is ever delivered."

He also claimed Suntech never handed over the solar energy facilities it donated to be used as prizes for schools taking part in a contest to foster innovation among youngsters. Instead, they were stored at its Wuxi warehouses, he said.

The federation responded to the accusations by saying that, as an organization receiving no financial support from the government, charging fees to cover administrative expenses is essential.

The charity usually draws 3 percent from cash donations, or if donations are in the form of goods, workers will consult with companies over an extra fee to cover management costs, said the website statement. It added: "The 50,000 yuan collected from the company is legal and reasonable ."

At the same time, Zheng, a staff member at the Copyright Society of China who did not want to be identified, said Luo exposed the scandal following a dispute with his former employers over earnings. The society was one of the three organizers of the school innovation contest.

"(Luo) was fired because of his bad personality, which was well-known to many of his colleagues," said Zheng.

Calls to Suntech went unanswered on Wednesday. However, in a public letter released on Tuesday the company promised all donations will be distributed before the end of this year.

The first batch of solar energy facilities had already been delivered to 13 schools in Xiangyang, Hubei province, by July 24. The second batch was sent by Aug 10. The third and fourth batches are already on their way to the schools, the company said.

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