BEIJING — One of China's richest moguls has come under scrutiny after setting up a massive charity fund, with state media suggesting Wednesday he could be trying to win public favour to avoid tax fraud charges.
Chen Fushu, a one-time grocer who amassed a huge fortune mainly through stock transactions, Tuesday announced the establishment of the 8.3-billion-yuan (1.17-billion-dollar) New Huadu Philanthropic Fund, the People's Daily said.
Chen, 48, says he hopes to model the fund after the Bill and Melinda Gates Foundation, a huge charity fund set up by the founder of software giant Microsoft, the paper said.
The fund, to which Chen has donated 45 percent of his personal assets, would be the country's largest ever civil charity foundation, the China Daily reported.
The tycoon, who holds large stakes in listed companies like Tsingtao Brewery Co Ltd, his own New Huadu Industrial Group and Yunnan Baiyao, was this month ranked number 25 on the Hurun list of China's richest people.
According to the China Daily, Chen's wealth jumped from 48 million yuan to 20 billion yuan when he sold 50 percent of his stake in Zijin Mining, a leading gold miner that went public in Shanghai in 2008 and Hong Kong this year.
The newspaper reported that Chen was under investigation for possible tax fraud over the deal, and said his charity efforts were "widely speculated" to be "a measure to save himself from the tax fraud accusation".
But in an interview with the Beijing News, Chen denied the accusations and said he was not the subject of any government probe.
"It has taken two years to get the approval to set up the fund from the Fujian provincial government," Chen told the paper.
"I have reduced my holdings in Zijin Mining three times, all this year, so there is no necessary link between the two... Up until now I can assure you there is no tax bureau investigating this."
China's richest business moguls, especially those who have amassed large fortunes like Chen through private enterprise, have often found themselves in trouble with the law.
Last year, billionaire Huang Guangyu -- the founder of one of China's largest home appliance retailers Gome Electrical Appliances -- was arrested and charged with illegal stock manipulation.
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