Seven people accused of rigging a lottery to help buyers with government connections land apartments in a new residential complex in Xi'an, capital of Shaanxi province, have been placed under criminal investigation.

The suspects work at either Xi'an Tianlei Property Co, which is building the project, or the technology company in Wuhan, Hubei province, responsible for running the lottery system, the city government said on Saturday.

They allegedly manipulated the computerized system to ensure certain people won apartments, according to the results of an official probe launched after a screenshot of a confidential spreadsheet listing the "backdoor clients" went viral online.

The spreadsheet included the names, phone numbers and ID card numbers of over 60 clients as well as their preferred units and their relationship with the local housing, planning, construction or land and resources bureaus.

In addition to the police investigation into the employees, the city government said 35 government employees had been punished in relation to the scandal, including eight who were "removed from their posts", six reassigned and five given warnings.

Tianlei Property has also been placed on China's social credit blacklist - affecting its access to government funding, bank loans and tax breaks - and ordered to rectify its practices.

Xi'an's housing management bureau issued a regulation on March 30 that said commercial residential buildings should be sold via lottery when the number of people registering an interest in buying an apartment exceeded the number of homes on offer. Tianlei's development, called Chang'an Residence One, is located near the Xi'an Subway Line 2's terminus, outside the city's South Third Ring Road.

Shaanxi Broadcasting Corp reported on May 25 that the developer sold 724 homes through the lottery draw on April 29. Some 3,439 potential buyers registered for the draw.

However, suspicions were raised among netizens that the lottery was rigged on May 24 when the screenshot of the spreadsheet began to circulate on social media.

On May 25, the district's publicity department said on Sina Weibo that an investigation into the matter had begun.

Meanwhile, Xi'an's housing management bureau said it had launched a campaign to fight illegal behavior in the sale of commercial residential buildings, including rigged lotteries. The official statement said the investigation found there were illegal sales behaviors in the Tianlei housing project. Some 106 apartments had been allocated illegally, it said. These homes will now be resold through a second lottery, which the original "winners" will be barred from entering.