The Minister of Internal Affairs has confirmed there is a fraud investigation into the granting of residency and citizenship to Auckland man Yang Liu.
Rick Barker issued the statement in response to questions about the circumstances in which the residency and citizenship were granted.
He says Mr Liu applied for permanent residency in January 2002 and was granted it in June that same year.
Mr Barker says Mr Liu applied for citizenship in May 2005. It was approved by the Associate Immigration Minister, Shane Jones, in August this year.
The Prime Minister, Helen Clark, was questioned about the investigation in Auckland on Saturday.
Miss Clark says Mr Liu donated money to Labour.
Asked whether her ministers have acted appropriately, she said she knows of no evidence to the contrary. She says the fraud investigation will be "pursued with vigour".
Labour MP Dover Samuels wrote a letter supporting Mr Liu's citizenship bid, and says it was effectively a character reference.
He says he did not know Mr Liu had made donations, and points out that National MP Pansy Wong also wrote to immigration officials on Mr Liu's behalf.
Mrs Wong asked the Department of Labour this year why Mr Liu had not been given citizenship since he was a successful businessman and a permanent resident.
The National Party leader, John Key, says he has no concerns about Mrs Wong writing to immigration officials on behalf on Mr Liu.
Mr Key has confirmed he met with Mr Liu three times, including twice before the 2005 election. He says Mrs Wong was present on two of those occasions.
Mr Key also says Mr Liu made an unsolicited donation to the National Party before the last election, but they did not discuss the donation, or Mr Liu's citizenship.
Mr Barker says the investigation may result in a prosecution or revocation of Mr Liu's residency status.
He added that there will be no further comment from ministers in order not to jeopardise the investigation.
