In its first official reaction on Monday, China blamed India's 'mistrustful attitude', while denying allegations that the Karmapa Lama in Dharamshala is an agent of the Beijing government.
"The speculation by India's media, regarding the matter of the Karmapa as a Chinese agent or spy, shows India is keeping its mistrustful attitude towards China," Xu Zhitao, an official of the United Front Work Department, which is in charge of ethnic and religious matters, told the state-run Global Times.
This is the first official Chinese reaction to speculation surrounding Karmapa's monastery in Dharamshala, after Indian investigators found huge sums of Chinese and foreign currency. The Karmapa said the money was sourced from donations.
In a rare reference in the state media to the Karmapa's escape in 1999 from Tibet to Dharamshala, Xu tersely said the "Karmapa left China in 1999 for the purpose of religious behaviour, just as he claimed."
He did not comment on the Karmapa's claims that he had fled from Chinese pressure to support the Beijing-approved Panchen Lama.
The 17th Karmapa Ogyen Trinley Dorje of the Kagyu sect is the third most important spiritual leader in Tibetan Buddhism. His position is also unique because he is seen as a potential successor to the Dalai Lama, who is described as a 'separatist' and 'splittist' by China.
"The 17th Karmapa Living Buddha is the first reincarnated Living Buddha confirmed and approved by the Central Government of the People's Republic of China after the peaceful liberation of Tibet in 1951," Xu said.