The government of Huojia county, Henan province, has started an investigation into the local environmental protection bureau and an electricity supply company, China News Service reported on Wednesday.
The move came after an incident on Sept 9 when locals took to the streets to complain about air pollution caused by the Zhongxin Chemical Factory on the outskirts of the county.
The same factory was the site of an explosion in September 2013 in which five people were injured.
According to the government, the factory started trial production without permission on Sept 3. The next day, the air smelled like rotten eggs. On Sept 9, the day of the protest, the factory was asked to stop production.
By Sept 11, the factory had stopped production.
The government said in a release that after the factory halted production, a few locals still organized a protest, which was illegal. So far 16 people have been put under control or fined.