Heyuan Royal Garden, a property located in Beijing surburb, is developed by a subsidary of Sinopec.

Sinopec recently the target of public anger for spending huge sums on expensive alcohol, is reported to have bought land in Beijing at an extremely low price and to have run a five-star hotel on it without a license for two years.

In 2006, a unit of Sinopec spent 50 million yuan (US$7.6 million) to buy land for the Heyuan Royal Garden at for about 1,000 yuan per square meter, or almost an eighth of a nearby residential project, according to the Economic Observer.

The company did not sign a land deal with China's Ministry of Land and Resources until last September, the newspaper said, although the hotel opened in 2008.

"The ministry allows companies to pay additional fees to obtain rights of the land if they have used the land otherwise than formerly stated," the newspaper said citing insiders. "It is usually a measure to avoid land auctions and obtain land at low prices."

The hotel's website says the building covers 40,273 square meters, but whole area is 1,050 mu, or 700,000 square meters, including 800 mu of forest.

"The land price is shockingly low if the forest is counted as the hotel's amenities," the newspaper said.

The hotel owner, Beijing Heyuan Royal Garden Hotel Co, is a company affiliated with Sinopec's service subsidiary, the report said.

The responsibility of the subsidiary is to "provide logistics and service for the headquarter and professional companies," according to the company's website.

A staff member said the land was granted by the National Development and Reform Commission. Both Sinopec and the NDRC declined to comment, the newspaper said.

Meanwhile, China's central television has revealed that the Guangdong branch of Sinopec is determined to find and punish the person who posted photocopies of drinks invoices on the Internet.

CCTV said the company believes the information was disclosed by an insider and has ordered an investigation. The company has also prohibited staff from talking to the media without permission.

On Friday, Sinopec suspended Lu Guangyu, head of the Guangdong unit, after claims the branch spent huge sums on expensive alcohol.

Publication of the invoices sparked public anger, especially at a time when fuel prices were at a record high after the government raised prices twice this year. Sinopec has been lobbying for higher fuel prices to compensate for losses caused by soaring crude oil prices.

"They (Sinopec) said they must raise gasoline prices to meet rising cost, while drinking Moutai in their air-conditioned offices," was one online comment.