SHANGHAI housing regulator will investigate three local property developers, including one selling the most expensive apartments on the Chinese mainland, for fraudulent sales practices, Shanghai Morning Post reported today.

Tomson Riviera, Jiahe International Building and Kin Wai City Oasis were alleged to have conducted fake trading and reserving apartments for speculation purposes.

Tomson Riviera has the mainland's most expensive apartments in the city's Lujiazui area. They began selling in October, 2005 at a price around 110,000 yuan (US$14,379) per square meter. It has signed only three contracts and three deposit contracts so far, while it has already withdrawn three deposit contracts. The "cancellation rate" is the highest among all Shanghai developers, the report said.

Feng Zhongliang, a manager in charge of Tomson Riviera, told the newspaper he "has no idea about the investigation."

He said it was normal to withdraw several deposit contracts and the sales were not booming because it is a luxury property. He said Tomson had not violated any regulations, the report said.

Jiahe International Building, in Hongkou District, began trading in March with 276 apartments, and the developer is suspected of reserving 204 apartments by means of presale for speculation, the report said. The apartments now sell at 14,500 yuan per square meter.

Developer of Kin Wai City Oasis in Baoshan District is suspected of fake trading because it withdrew 304 deposit contracts from October 2006 to February, the report said.

An official of the Shanghai Housing, Land and Resources Administrative Bureau said the probe will begin in two days time.

Eight government departments, including the Ministry of Construction, began a joint crackdown on illegal practices in the property market in March.