Ren Ci will continue tending to its 120 nursing-home patients and 300 chronically sick patients at its facilities in Jalan Tan Tock Seng and Buangkok through the probe.
Health Minister Khaw Boon Wan told The Straits Times last night that he believed in a 'firm, fair and transparent' approach to the probe.
While an inquiry was called for because the transactions had not been 'well explained' by Ren Ci's management, he said 'we should not jump to any conclusion until the inquiry is completed. That will not be fair to the parties involved'.
His ministry said yesterday that a review of the charity had turned up 'possible irregularities in certain financial transactions' involving Ren Ci and some external parties, and that an inquiry would clarify them.
The Straits Times understands that several companies had been given loans, some amounting to hundreds of thousands of dollars. But Ren Ci's books recorded loans that, in some cases, were several hundred thousand dollars more than what was reflected in the borrowers' books.
These irregularities surfaced in the wake of the ministry tightening corporate governance among the charities under its wing last year, following the NKF scandal of 2005.
In July last year, the ministry appointed accounting firm Ernst & Young to carry out a general review of the operations at its 12 largest IPCs, including Ren Ci.
At the end of the review in February, Ren Ci was asked to split the role of board chairman and chief executive officer.
Both positions were then held by Venerable Ming Yi, a colourful character who has performed death-defying stunts in the charity's popular annual televised fund-raisers.
He has since become Ren Ci's honorary CEO. Mr Chua Thian Poh, chief executive of property developer Ho Bee Group, became the charity's chairman in September.
The ministry next got Ernst & Young to delve deeper into Ren Ci's operations, which was when the loan discrepancies were uncovered.
Yesterday, the ministry informed the Ren Ci board that a probe under the Charities Act would be convened. This is expected to take three months, after which the findings will be disclosed and 'appropriate measures' taken.
Auditors were seen moving files into a room on the ground floor of the hospital's Buangkok premises just before 7pm yesterday.
Venerable Ming Yi was seen on the premises, but declined to take calls to his cellphone.
Mr Chua, contacted in China, where he is on a business trip, declined comment and referred The Straits Times to a statement put out by Ren Ci, which said: 'Ren Ci Hospital & Medicare Centre has a culture of strong corporate governance and transparency. When complaints are made, they will be fully investigated.
'We would like to reassure the public that the professional standards and services of Ren Ci will remain intact and the day-to-day operations and patient care will carry on undisrupted.'
The charity employs more than 300 people and earned about $30 million last year - $9.5 million from donations, $10 million from grants and sponsorships, and $9.8 million from fund-raisers and other activities.
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