The Chinese public and state-controlled media could be expected to welcome the founding of the country's largest-ever private charity by one of its wealthiest business tycoons.

But when Chen Fashu, the 15th richest man in China this year, with a personal fortune of about $3.7bn, announced last week he would donate roughly Rmb8.3bn ($1.2bn, €821m, £744m) to his new charitable foundation, state media responded by questioning his motives.

Even the People's Daily, the designated mouthpiece of the Chinese Communist party, suggested the charity might be used to evade a possible tax investigation and questioned whether the funds would all be used for charitable causes.

According to Tang Jun, Mr Chen's spokesman and chief executive of the new charity, the Xinhuadu Philanthropic Foundation, Mr Chen is not under investigation and speculation over his motives is completely unfounded.

China's state administration of taxation refused to comment but a senior government official in charge of overseeing charitable donations expressed reservations about the donation.

“The donation has not yet become a reality; it's just a beautiful expectation,” Wang Zhenyao, director of the social welfare and charity promotion department of the ministry of civil affairs, told the Financial Times: “Anyone can issue a news statement saying they are going to donate money but whom have they donated to? There is no answer because their donation has not happened yet.”

The focus on Mr Chen's intentions is common in a society that is deeply sceptical of people who have been enriched by China's rapid but unfinished transition from central planning to a more freewheeling market-driven economy.

The common public perception is that the wealthy in China have used connections with powerful officials to make their fortunes.

“There is still a general mistrust in China of the motivations for donations by the super-wealthy,” said Rupert Hoogewerf, who compiles the annual Hurun list of China's richest.

Many charities are viewed with suspicion, in large part because the sector is poorly regulated and charitable foundations have often served as conduits for bribery, embezzlement and tax evasion in the past.

In the wake of a corruption scandal that toppled the Communist party boss of Shanghai in 2006, details emerged of how prominent charities were used to funnel bribes to officials and their families in return for plots of prime real estate and other favours.

The poor perception of charities and the immaturity of the regulatory system are the main reasons why Chinese philanthropy has been slow to develop, according to Mr Hoogewerf.

Previously, China's largest known charitable donation was a $420m pledge made by Yu Pengnian, an 87-year-old property developer from Shenzhen, to his own foundation dedicated to cataract operations.

Mr Chen's Xinhuadu foundation would be modelled on the Bill and Melinda Gates Foundation and concentrate on providing education to impoverished areas of China, Mr Tang told the Financial Times.

He said Mr Chen hoped to co-operate with the Gates Foundation and would eventually branch out into medical care, environmental issues and other areas.

Mr Chen, 48, began building his fortune by selling groceries in the 1980s but became a billionaire by investing early in Zijin Mining, China's largest gold miner, which listed on the Hong Kong stock market in 2003 and in Shanghai in 2008. As soon as a one-year lock-up on the Shanghai-listed shares ended in April, Mr Chen sold two-thirds of his personal stake in Zijin on the open market and invested most of the $410m proceeds buying 12 per cent of Chinese traditional medicine maker Yunnan Baiyao and acquiring a 7 per cent stake in Tsingtao Brewery from Anheuser-Busch.

Mr Chen's donation to his foundation will mostly be in the form of the shares he still holds in Zijin Mining and Tsingtao Brewery.

In September, state media reported that the state administration of taxation was investigating Mr Chen for tax fraud related to the sale of shares he owned in Zijin Mining.

But Mr Tang said that under current Chinese law Mr Chen was not required to pay tax on his share sales. “If the government asks us to pay [tax] we will be the first to do so, but there is no such regulation at the moment,” he said. “The public should not doubt us.”

Specialist lawyers and accountants said the rules were vague but that Mr Chen would not usually be required to pay tax on a share sale.