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The Chinese city of Xi’an has halted sales of China Vanke projects after announcing the property developer, one of the country’s largest, was suspected of illegal property sales there.

A statement published by the Xi’an Housing Security and Housing Administration on Monday said Vanke was suspected of illegal sales in connection with two projects, Vanke Chenghsi Zhi Guang and Vanke Dongfang Chuanqi.

The bureau said it had temporarily halted sales of at least a dozen Vanke-branded projects in Xi’an, as well as stopped accepting pre-sales applications for new residential projects from the company.

The administration did not provide any further details on the suspected illegal activities. However, the sales halt comes after China’s Ministry of Housing and Urban-Rural Development in October called for more stringent policing of what it deemed “illegal and irregular sales behaviour” in real estate as policymakers in Beijing pressured local governments in major cities across the country to discourage property speculation in the face of rapidly rising prices.

Hong Kong-listed shares in the developer dropped as much as 3.9 per cent on Wednesday as the announcement was picked up by Chinese financial news outlets such as Sina Finance.

The move by Xi’an is not the first time a Chinese city has slapped a high-profile developer with a sales halt: in late 2014 developer Kaisa was hit by a sales ban at three of its housing projects in Shenzhen. Said city accounted for around a fifth of the company’s sales at the time, and in January 2015 it defaulted when its chairman Kwok Ying Shing resigned, triggering the mandatory repayment of a $52m loan owed to HSBC.

Vanke’s difficulties in Xi’an come shortly after it put the wraps on a protracted and unusually public battle for control of the company that lasted more than a year and ultimately resulted in chairman Wang Shi retaining control. Insurance mogul Yao Zhenhua, who had spearheaded the highly leveraged takeover attempt, was banned by regulators from China’s insurance industry for a decade.

Separately on Wednesday, Vanke announced in a statement published by the Shanghai Clearing House that it was cancelling a Rmb1.5bn ($217.8m) bond sale scheduled for today “in view of recent changes in the market”.

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