A Shanghai government spokeswoman said yesterday that the city was co-operating in the investigation of disgraced property tycoon Chau Ching-ngai and denied reports that a former vice-mayor was under house arrest for his involvement in the land scandal. 'The city government is actively co-operating. I have not received complete information from government departments,' spokeswoman Jiao Yang said. She also denied a report in Singapore's The Straits Times which said former Shanghai vice-mayor Sha Lin was under house arrest. The newspaper has since run a correction on the June 20 story and printed a letter from Mr Sha denying the allegation. 'This [report] was extremely irresponsible and completely without basis,' Ms Jiao said. The original report was picked up by overseas media and websites. Mr Sha served as vice-mayor from 1993 to 1996 and as a vice-chairman of the Shanghai People's Congress, the local legislature, from 1996 until his retirement earlier this year. Residents involved in a lawsuit against Mr Chau allege officials of the Jing'an district government colluded with the developer to grant land for free without providing for people displaced by a property project. The plaintiffs also claim higher-level Shanghai and central government officials had ties to Mr Chau. State media say the developer has been detained in Shanghai for tax and financial problems. In the wake of the scandal, the city has promised to review all land deals made over the past two years and implement an auction system for land sales. A mainland newspaper reported yesterday that Shanghai would crack down on property speculation by requiring buyers to develop the property within two to three years after acquiring it. However, officials would not confirm the report.
