
Lee Ping, the administration manager of a Chinese consortium building a major hydropower project, was accused on May 17 of throwing the Quran on the ground, prompting hundreds of workers to attack his company offices.
Police took Lee into protective custody at a secret location after protests erupted at the company offices near Muzaffarabad, but on Thursday he was cleared.
"Police investigation has cleared the Chinese worker of desecration of Quran charges," cabinet minister Matloob Inqalabi told reporters.
"No such incident of desecration of Quran happened there," he said, adding that action would be taken against the people involved in the violence.
"Police has identified 35 people who were involved in violence at the project on that day. Legal action will be taken against them," said Inqalabi.
But he refused to reveal the whereabouts of the Chinese worker or what would happen to him.
Lee was accused of throwing a copy of the Quran on the ground while moving the belongings of a Pakistani doctor after he had refused to vacate his room for relocation.
Pakistan and China have close relations and Chinese firms and engineers are working in development and energy projects across the country.
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