China's official news service is reporting that residents of a southern village, who protested for weeks about land grabs, had valid complaints.
Tensions first flared in Guangdong province's Wukan village in September, when residents began protesting what they viewed as illegal land grabs and local government corruption.
The official Xinhua news agency on Saturday quoted Guangdong provincial investigators who said that a livestock company, Lufeng Fengtian Livestock Products, used more land than was officially approved. Another business, Guangdong Yidazhou Group, was behind with its land payments to villagers.
Investigators also said that Xue Chang, former secretary of the village party committee, embezzled money to buy a vehicle for personal use.
Earlier this week, Chinese Premier Wen Jiabao warned government officials they must protect farmers' land rights and give them a much larger share of the profits when their land is taken over for development.
China has been unsettled in recent months by a series of localized protests over such issues as corruption, land seizures and pollution-spewing factories. In many cases, authorities have given in to the protesters, whose causes were widely publicized through social media.
Some information for this report was provided by AFP.