Taian Table - one of 26 restaurants in the city to receive Michelin stars - "suspended" business yesterday "due to internal reorganisation", a notice on its front door said.
The starred establishment, on the ground floor of a five-storey residential building in downtown Shanghai, serves Western dishes ranging from grilled endives to smoked beets by chef Stefan Stiller, according to the restaurant's website.
The "graceful restaurant" has a menu that "changes monthly and makes good use of excellent ingredients and clever recipes," according to the Michelin description.
The diner was previously ordered to shut down by local officials due to lack of proper licences, the Xinmin Evening News reported today, adding authorities stepped in after neighbours complained.
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Residents who live above the restaurant told AFP the kitchen smoke and noise interrupted their normal life, and they petitioned local regulators to have the diner shut down.
"The noise is always there, with the stereo subwoofer vibrating. It's so hot where we live, but we can't open our windows," Zhang Fuzhen, who live on the second floor of the building.
Michelin launched its inaugural China guide Wednesday to great fanfare.
Restaurants recognised by the culinary bible have used the prestigious award to build big businesses, with Hong Kong's Tim Ho Wan and Taiwan's Din Tai Fung turning into international franchises.
The original idea for the restaurant was "to build a small place to entertain our friends and to have some foodies and chef friends around to create new and creative dishes," Taian Table said in a statement, adding "we certainly never intentionally planned to violate any rules."
Michelin in China did not immediately reply to a request for comment.