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China's acting Ambassador Zhao Lijian on Thursday rejected allegations of corruption levelled against Punjab Chief Minister Shahbaz Sharif, saying reports of him receiving kickbacks from the Multan Metro Bus project through a 'fake' Chinese firm are false.

Responding to a tweet, Ambassador Zhao said that the Chinese company in the middle of the scandal, Yabaite, was not operating in Pakistan and had presented "fake letters to cheat [the] government".

He added that the Chinese government had taken action against the firm.

On Tuesday, ARY News' reporter Hamza Habib Farooq had alleged that a Chinese regulatory authority had released a report stating that the Punjab chief minister had received more than Rs10 million in kickbacks from the Multan Metro Bus project through Yabaite.

Farooq had reported that the Chinese regulator had found discrepancies in income reported by Yabaite, which was found to have business links to a firm called Capital Engineering and Construction Company in Pakistan.

On further investigation, the Chinese board 'discovered' that the company in Pakistan belonged to Shahbaz Sharif.

Shahbaz had vehemently rejected the allegations in a press conference on Wednesday, saying that "if anyone can prove a penny of corruption against me, they can hold me accountable".

Moreover, Punjab government spokesman Malik Ahmad Khan said on Thursday that the provincial government was ready to join the investigation that the China Securities Regulatory Commission (CSRC) was conducting regarding the affairs of Yabaite.

Khan also said that according to the Securities and Exchange Commission of Pakistan, no team of CSRC ever visited Pakistan to investigate or record statements in connection with the Multan Metro Bus project.