The head of the Sichuan grain bureau has been removed from his post and is now in police custody following an investigation into a fraud scandal, the 21st Century Business Herald reported on Tuesday.

Li Yiliang was detained last month following an investigation launched in May by provincial prosecutors. Three other officials have also been detained, the report said.

Prosecutors said yesterday that Li was removed from his post in June and is being questioned about missing public funds.

The sums involved are "large", they said, without giving exact figures.

Li is accused of being involved in a price-fixing scam involving the sale of old grain for animal feed, prosecutors said.

He is also alleged to have been involved in a scam two years ago to embezzle funds allocated for the construction of a four-star hotel near Chunxi road, one of the busiest in Chengdu, the Sichuan capital.

While the bureau claimed the hotel had a price tag of 420 million yuan, a spokesman for the Sichuan Huashi Group Co Ltd, one of the firms that bid for the construction contract, said it should have cost no more than 200 million yuan.

As well as the charges against Li, Sichuan prosecutors have said the general managers of three firms under the grain bureau are also under investigation for their roles in a plan to embezzle more than 2 million yuan ($293,000) of public funds in May.

(China Daily October 23, 2008)