PetroChina, the nation's largest oil company, has denied a recent scandal that their employees were involved in purchasing over 1,000 apartments with preferential treatment in Beijing, CCTV reports.

A CCTV report on Tuesday said that China Petroleum Huayou Beijing Service Corporation, a logistics service organization of PetroChina, purchased more than 1,000 apartments in Beijing for 2.06 billion yuan for its employees with the unit price accounting for just 30% of the market price.

The sales department of Taiyang Xingcheng, which is positioned in a convenient location between Beijing's 3rd and 4th ring roads, confirmed to CCTV that PetroChina employees bought up nearly all of the finished buildings of the project in its 3rd phase, which includes 8 apartment buildings, two commercial buildings, and two underground parking lots.

These houses are sold at a mere 9,000 yuan (1,300 US dollars) per square meter, while the prices at neighboring estates are all above 20,000 yuan.

The key of the scandal is who paid for the purchase and why PetroChina employees got knock-down prices.

The issue, followed by media reports, has stirred public gorge and raised doubts over the many privileges enjoyed by employees of state-owned enterprises.

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However, Wang Qiong, an official with the China Petroleum Huayou Beijing Service Corporation, claimed that those apartments were paid for by the company's employees, not the company.

China Petroleum Huayou Beijing Service Corporation has been in talks with developers at Taiyang Xingcheng since 2005 to help its employees find housing, and the price at that time was just around 9,000 yuan per square meters, Chinese media YNET reported on Thursday, citing Wang as saying.

At the start of 2009, the housing market was sluggish so developers were particularly pleased to see the size of PetroChina's group purchase for employees, so they inked the deal with low price, according to Wang.

However, analysts doubt the transaction is a form of corruption.

Li Kaifa, a well-known economist in China, pointed out that the core of the market economy is basic economic law, so there must be something behind the transaction; if the deal does not follow economic law, a 70% discount is impossible as housing prices are rising these days.

Monopoly companies that offer excessively high benefits are another kind of corruption, Li added.

The public should not only focus on individual corruption, but also group corruption, Li suggested.

China