The central government has scaled back its investigation into the scandal involving Shanghai tycoon Chau Ching-ngai and former Bank of China (Hong Kong) chief executive Liu Jinbao. The number of investigators sent to Shanghai had been reduced to a few dozen from several hundred early last month, informed mainland sources said yesterday. It also emerged that Executive Vice-Premier Huang Ju, former party boss of Shanghai, has been put in charge of the case. It had earlier been speculated that the mainland's top anti-corruption official, Wu Guanzheng, would head the probe. An investigation led by Mr Wu, the chairman of the Commission for Discipline Inspection, the Communist Party's anti-graft body, would have meant a much wider investigation into corruption among government officials. The involvement of Mr Huang, who has a financial portfolio, suggests the investigation will instead focus on alleged financial crimes involving Mr Chau, Mr Liu and several other property tycoons in Shanghai. Observers say the moves are aimed at giving a lower profile to the case, which has sparked intense speculation regarding factional infighting. Some believe President Hu Jintao and Premier Wen Jiabao have used the implication of people linked to former president Jiang Zemin and the so-called Shanghai faction to solidify their own grasp on power. Others, however, reject this suggestion. 'Many people at home and abroad are talking about intense political jostling between Mr Hu and Mr Jiang, but this is not the case,' one mainland source said. It was unlikely that, after only being on the job for a few months, Mr Hu and Mr Wen would attempt a serious political challenge to Mr Jiang, he said. He said the decision to give a lower profile to the investigation was at least partly prompted by the attention the case was getting from overseas media. 'Intense speculation about a power struggle so early in their tenure will do the new leadership under Mr Hu no good at all,' he said. He and other sources said the current probe in Shanghai did not involve the relatives of prominent city leaders. Overseas press reports have suggested relatives of Mr Huang, National People's Congress chairman and Shanghai's ex-party boss Wu Bangguo, the city's current party secretary, Chen Liangyu, and Shanghai mayor Hang Zheng have been investigated in connection with the Chau case. Some have drawn parallels between the case and that of businessman Lai Changxing, who is alleged to have overseen a multi-billion yuan smuggling empire. The Lai case has implicated several dozen high-ranking government officials and senior military officers including a deputy minister of public security, a top military intelligence officer and a number of top officials of Fujian province. But sources said the comparison was not accurate. 'There is no parallel to the Lai Changxing case as some people have suggested,' one source said. Shanghai government spokeswoman Jiao Yang said yesterday that the city was co-operating in the investigation into Mr Chau. 'The city government is actively co-operating. I have not received complete information from government departments,' she said. Sources said the central government only had itself to blame for the media attention it was now trying to defuse. They said it had rushed into the probe and now had a political mess on its hands. They said the central government acted swiftly to recall Mr Liu from Hong Kong and detain Mr Chau in Shanghai in May after it learned of a probe by Hong Kong's Independent Commission Against Corruption into commercial frauds involving Mr Chau, his wife, Mo Yuk-ping, and the Bank of China. However, an initial investigation cleared Mr Liu of any wrongdoing in the bank's decision to extend a $2.1 billion credit facility to Mr Chau to fund his takeover of Shanghai Land. Fearing an investor backlash against the bank, the bank's Hong Kong unit confirmed on June 10 - after more than 10 days of dodging the question - that Mr Liu was under an official investigation. But it said he was being investigated in connection with loans he had approved while at the bank's Shanghai branch, shifting the media focus to Shanghai. Soon after, Mr Chen, the Shanghai party boss, and Mr Hang, the mayor, confirmed media speculation, saying Mr Chau and other property tycoons were being investigated, causing a media frenzy. Meanwhile, Shanghai government spokeswoman Jiao Yang yesterday denied a report in Singapore's The Straits Times which said former city vice-mayor Sha Lin was under house arrest for involvement in the scandal surrounding Mr Chau. 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 claim 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 in the lawsuit 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. Additional reporting by Bill Savadove