A Shenyang land official has disassociated herself from comments suggesting illegal land use by Yang Bin, China's second-richest man who also controls and chairs the Hong Kong-listed Euro-Asia Agricultural (Holdings). The comments from Deng Song, a vice-director of the Shenyang planning and land bureau, were the key to a Southern Weekend report which cut Euro-Asia shares 9.89 per cent last Thursday. The stock has gone on a roller-coaster ride recently because of other corporate governance and transparency concerns. In the report, which appeared online on Thursday afternoon, Ms Deng was quoted as suggesting Mr Yang had not obtained proper official approval before acquiring about 220 hectares of mostly farm land from peasants. 'Such a large piece of land was being acquired,' she reportedly told the Guangzhou-based paper. 'Had an application been filed, it definitely would not have been approved.' The lot is now part of Mr Yang's 1.8 billion yuan (about HK$1.68 billion) Holland Village development, said to cover anything from 220 ha to 400 ha of land. Part of Euro-Asia's flower and vegetable production takes place at the complex but it includes about 300,000 square metres of plush residential real estate and a theme park with indoor beaches and tropical gardens, both under Mr Yang's private firm Shenyang Euro-Asia Industrial. Land regulation enforcement has often been lax at local levels but failure to win official endorsement for a land deal could expose the project to official whims. Beijing has also been concerned that encroachment of buildings on farm land threatens agricultural production. However, Ms Deng distanced herself from the reported comments on Friday. 'I am a director in the general office [of the bureau] and am not authorised [to make such statements],' she said. 'I've never approved anything myself before and will never do so in the future. 'I was only helping arrange an interview for the reporter. He instead quoted me in the story. I am very angry.' Ms Deng, however, appeared to alternate between denying outright having made the comments and arguing they had been taken out of context. 'It would not have been up to the municipality to approve the acquisition anyway,' she said at one point. Land-use documents provided by Mr Yang last Thursday showed the Liaoning provincial government had approved Shenyang Euro-Asia Industrial's acquisition of the lot to be used for a 'high-technology agricultural pilot programme'. The approval letter was dated December 28, 1998 - the day after the State Council announced a land law and an act to protect agricultural land, and a few days before the laws came into force at the start of 1999. Provincial government approval had always been a minimum requirement for the purchase of agricultural land, a Liaoning land official said last Friday, but the new rules required central-government approval for purchases of 35 ha or more of farm land. Meanwhile, Euro-Asia may move a large part of the financial management functions of its Shenyang head office to Hong Kong, Euro-Asia vice president for corporate planning and development Rex Chiu Wing-Chor said. The move would help the firm skirt China's strict foreign exchange controls and reduce its tax liabilities. Slow fund transfers last month made Mr Yang secure a bridging loan, which caused unease among investors.