The chief of the Xiangxi Tu and Miao autonomous prefecture was sacked for the mishandling of an illegal fundraising scandal, which led to public demonstrations in September, the official newspaper of the Hunan prefecture said on Wednesday.
The United Daily said some senior officials of the Party's provincial committee announced at a special meeting on Tuesday in Jishou, capital of the prefecture, that Xu Keqin, deputy Party chief of the prefecture in Hunan province, had been removed from his Party position.
The local people's congress was also advised to remove Xu from the position of governor.
He was accused of mishandling the fundraising scheme in Jishou, which amounted to about 10 billion yuan ($1.5 billion) and led to two demonstrations in early September.
Caijing magazine said the fundraising scheme developed during the 10 years when Xu acted as vice-mayor, mayor, and Party secretary of Jishou from 1995 to 2006.
Xu became chief of the prefecture in December of last year, when his predecessor was arrested for corruption.
Caijing also said at least 113 officials from government offices and local companies are now being probed, on suspicion of taking part in the illegal fundraising scheme.
Teng Wancui, head of the Party's united front work department of the prefecture, has been in custody since Oct 24 for her role in the illegal financing scheme, Rednet.com, a Hunan-based news website said.
Teng is also suspected of taking bribes and earning illegal profits from holding stakes in some mining companies.
However, the press office of Xiangxi prefecture denied some parts of the report when contacted by China Daily saying that the number is still to be confirmed.
"The case is under investigation and we will make the results known to the public as soon as possible," Fang Hua, director of the press department, said, adding that there had been some misunderstanding in some media reports.
A probe into the fundraising scheme, which involved a large number of local companies, was launched in the wake of the demonstrations.
Underground fundraising is regarded illegitimate in China. As an easy-to-access financing alternative for small and medium-sized enterprises strained by the capital squeeze, it offers unusually high interest rates to attract investors.