'The amount of money involved and the ability to repay is not the issue here.''
Saying that it is important for charities to be transparent and to build trust with the donating public, the spokesman added: 'That some repayments have been made, after discrepancies have been identified by auditors, does not detract from the need to establish the facts surrounding the original transactions.'
The Sunday Times understands that the amount of money not accounted for adds up to a few million dollars, and not a few hundred thousand as the Venerable Ming Yi had said. Some of the loans were apparently made without approval from the board.
The Venerable Ming Yi was both board chairman and CEO till February this year, when Ren Ci was asked to split the two roles following a review by accounting firm Ernst & Young ordered by MOH.
One of the companies which was given an interest-free loan of between $200,000 and $300,000 was the Mandala Buddhist Cultural Centre.
The Venerable Ming Yi and a former Ren Ci board member, Mr Wee Beng Seng, are the two registered owners of the centre. Mr Wee has said the centre is not making any profit and has not repaid the loan.
The probe into the charity, the second largest under MOH's jurisdiction after the National Kidney Foundation (NKF), was announced last Wednesday.
The charity will not have its Institution of a Public Character status renewed when it expires on Nov 27. This means that donations will not be tax-exempt.
Almost a third of the charity's $30 million income this financial year came from tax-exempt donations. The inquiry is expected to take three months.
The MOH spokesman said: 'Managing a charity, or volunteering to help out in one, is not just about doing charitable work.
'It is also about carrying out the work professionally, with good systems in place. Charities have a stewardship responsibility to the donating public.'
She said that there are many charities that are doing good work and their efforts should be recognised.
Pointing out that public confidence in charities had 'taken a beating' since the largest and best known charity, the NKF, was found to have misused public funds, the spokesman said of the probe into Ren Ci: 'We urge the public not to jump to any conclusions or be overly speculative.'