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REN CI Hospital and Medicare Centre, now under probe for financial irregularities, had contravened certain guidelines on how charities should be run when it gave out interest-free loans.
For example, under the new Code of Governance for charities and Institutions of a Public Character (IPC), it was required to obtain board approval for any loans made by the charity, said Mrs Fang Ai Lian, chairman of the Charity Council, on Monday.
Mrs Fang told the media at the launch of the Code: 'What was done was not something in the best interest of the charity.'
Besides, there was a conflict of interest in Ren Ci's case as its honorary chief executive, Venerable Ming Yi, is one of the owners of a business that Ren Ci lent money to, she pointed out.
The Health Ministry is now probing Ren Ci, one of Singapore's largest charities, after it discovered that it has given out millions of dollars in interest-free loans to various companies. Some of these loans were made, apparently, without board approval.
Also, there were discrepancies between what the charity recorded it had lent and what the companies involved recorded it had borrowed.
Under the new Code, there should be procedures to handle conflict of interest situations, for example, when a board member has vested interest in businesses the charity deals with.
One guideline is that the board member should not vote on the matter or take part in discussions regarding the business.
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