As the rest of the world smarted from the global financial crisis, it seemed that boisterous Hong Kong had landed a blockbuster property deal.

In October, Henderson Land Development Co signed agreements to sell 25 units at a luxury apartment building with an expansive view of the city's harbor - including a 572-square-meter five-bedroom duplex with a whopping price tag of nearly US$57 million.

At the time, it was believed to be Asia's most expensive property by square foot at nearly US$9,200.

Last month, Henderson, whose Chairman Lee Shau-kee was ranked No. 22 on this year's Forbes billionaire list, announced that 20 of the 25 deals, including the record-breaking flat, fell through.

Documents obtained by legislators and released on Monday showed that the developer refunded US$22.4 million of the US$46 million in deposits it received from the 20 buyers - 20 shell companies that used the same law firm.

Now some are wondering if the October sales were simply a sham to prop up property prices.

Police in Hong Kong are investigating and legislators have summoned Henderson executives to a special hearing in a brewing controversy that shines the spotlight on the high-stakes game of Hong Kong real estate.

The abandoned deals have generated outrage in this crowded coastal city of 7 million, where less than a quarter of its mountainous land is developed, opposition lawmaker James To said.

One of the most expensive places in the world to live, some 47 percent of Hong Kongers live in government-subsidized housing - so locals are naturally upset at the suggestion that the territory's already ultra-rich property tycoons are manipulating the market to make an even bigger profit.

"There are so many suspicious aspects," To said. "There needs to be an investigation. This involves the integrity of the system."

Hong Kong's Apple Daily said in an editorial on Tuesday that the mass back-outs are "extremely unusual" and questioned why Henderson didn't seek further damages from the buyers in addition to keeping part of the deposit.

"For a private enterprise that cares about every penny, for a listed company that's supposed to maximize shareholder profit, this is too weird, too inconceivable," the newspaper said.

Henderson has denied wrongdoing. A Henderson spokeswoman said yesterday the developer has no business dealings with the 20 buyers other than the flat sales and that it granted extensions on the closing dates at their request.