Elders at Matauri Bay in the Far North are considering occupying an island in the Cavallis unless the Chinese owners show their faces.
The Overseas Investment Office (OIO) has spent almost four years investigating whether the sale of Motukawaiti Island, about 30km north of Kerikeri, went through without its consent in 2010.
Since then, the owner has been threatened with liquidation and the property taken over by the mortgage holder, who is now advertising it to an exclusive global market for $30 million.
In August 2010, the island was sold to a company called St Morris NZ Limited, whose director is Wenning Han.
Last year the mortgage holder on the property - Jun Zhang - applied to put St Morris NZ Ltd into liquidation, claiming the company owed him $16 million.
That application was struck out, but ownership of the property was transferred to Mr Zhang in August last year.
Ngai Kuta kaumatua Nau Epiha said the Chinese owners had refused to meet tangata whenua and had insulted the iwi by sending their agents.
"It's gone from hurt to anger, and (desperation). That's the feeling of the elders at the moment.
"We're trying to communicate. We're trying to be friends and as people of the whenua, of the land, but nothing is coming across to us at all."
Mr Epiha said Ngati Kuta were discussing occupying Motukawaiti and had banned the Chinese from using the Matauri Bay boat ramp to access the island
OIO spokesperson Annelies McClure said in a statement it could not comment because that would impede the ongoing investigation.
However, it confirmed two staff had worked on the investigation since November 2010.
Trying to communicate - Samuels
Former Minister of Maori Affairs Dover Samuels, of Ngati Kura, said local Maori had been trying to communicate with the owners for the past four years, without success.
Mr Samuels said they had met was a string of representatives.
"In the last few months we've been dealing with a guy from Peru who says that he's related to one of the owners and that he acts on their behalf. But really, (with) respect, we don't want to talk to him. We want to talk kanohi ki te konohi [face to face] with the Chinese owner, and that's never happened."
In 2012, the then Minister of Land Information Maurice Williamson said the OIO was investigating because St Morris did not apply for, nor obtain, consent to buy the island under the Overseas Investment Act 2005.
Ms McClure said it continued to seek information and documents from various parties but would not release details because that would impede its ongoing investigation.
Labour Party deputy leader and finance spokesperson David Parker, who has asked 10 parliamentary questions on the issue, said he had never had clarity on the issue.
"The Overseas Investment Office should tell us what's happened. They've had years to make clear whether this was a legitimate transaction, whether the beneficial owner of the property was a New Zealander or whether it was an illegal overseas purchaser of New Zealand land."
Land Information Minister Michael Woodhouse said he had only recently received the portfolio.
"I have been briefed on the long-running and complex investigation into Motukawaiti Island. While the investigation is ongoing, it is not appropriate for me to comment further," he said.
New Zealand First leader Winston Peters said a caveat should have been put on the transfer of the island title if there was doubt over the legality of the sale.
"What you've got is an Overseas Investment Office which is a rubber stamp for approvals that don't do their job properly, and this is a classic example," Mr Peters said.
"How could two people be working on this issue since 2010 and not know the answer."
