Two consumer watchdog groups called Thursday for the California stem cell program to put a hold on a $2.6 million cloning grant announced last week for a Los Angeles research enterprise that the groups say is linked to ethical lapses involving a South Korean fertility specialist.

CHA Regenerative Medicine Institute, described as a nonprofit subsidiary of a for-profit South Korean company, CHA Health Systems, was among 29 grant recipients listed last Friday by the California Institute for Regenerative Medicine.

The CHA researchers at the Los Angeles institute intend to make customized nerve cells from patients with Lou Gehrig's disease, using human embryonic stem cell lines and a cloning method known as somatic cell nuclear transfer.

The Los Angeles Times reported last month that Kwang Yul Cha, a well-known South Korean infertility expert who heads CHA Health Systems, may have plagiarized another researcher's work. Cha denies the charge. He also was accused of improperly identifying himself as a medical doctor in California even though he isn't licensed to practice medicine in the state.

A medical director at a CHA-affiliated fertility center in Los Angeles is at the center of a dispute by a patient.

The watchdog groups are also raising issues about the nonprofit status of the CHA Regenerative Medicine Institute. Only nonprofits were allowed to compete for the $76 million worth of stem cell grants approved on Friday.

All these allegations were given fresh circulation Wednesday by an Internet site called the California Stem Cell Report, which tracks the $3 billion state stem cell research program authorized by state voters in 2004 under Proposition 71.

Citing "an array of troubling questions" about the $2.6 billion grant, Marcy Darnovsky, associate director of the Center for Genetics and Society in Oakland, called Thursday for the state Prop. 71 agency to "live up to its oft-stated commitments to transparency and responsibility by freezing this multimillion-dollar award while a thorough investigation is undertaken."

Separately, the Foundation for Taxpayer and Consumer Rights in Santa Monica sent a letter to Dr. Zach Hall, president and chief scientific officer of the stem cell agency, also calling for an investigation.

"It's imperative that stem cell research funded by the state of California be conducted only by organizations demonstrating the highest ethical standards," wrote John M. Simpson, stem cell project director at the Santa Monica group. "Based on what is known so far, a thorough examination of the activities of CHA Regenerative Medicine Institute, its affiliates and leadership are in order before any funds are transferred."

Jason Booth, a spokesman in Los Angeles for CHA Health Systems, said the research unit is a bona fide California nonprofit whose status was not at issue, and that its "grant was based on a thorough scientific review that speaks for itself."

A spokesman for the California Institute for Regenerative Medicine said any questions about the conduct or credentials of researchers will be investigated as a matter of course during a pending administrative review.

Dale Carlson, communications director for the agency, said neither of the two nonprofit groups "understands how the review process works."

He said the researchers were judged on scientific merit of their proposals, which in the CHA case was deemed to be "nicely developed" but in some respects "overly ambitious" by a panel of experts, who wound up giving the proposal a winning score of 77 out of a possible 100.

Carlson said that matters such as corporate versus nonprofit status, and researcher credentials, will be examined in the staff review built into the process. "Only when that is completed does a notice of grant award go out," he said.