The Labour Party is calling for former prime minister Jenny Shipley to step aside as the chairperson of the board of Genesis Energy while she faces legal action.
Dame Jenny is strongly denying any wrongdoing in connection with the collapse of construction company Mainzeal in 2013.
The company's liquidators have filed a civil claim against her and other former directors, including Sir Paul Collins.
The proceedings include allegations of a breach of directorial duties.
Labour state-owned enterprises spokesperson Clayton Cosgrove said the accusations were deeply concerning and Dame Jenny should step down from Genesis during the legal action.
"I think it is appropriate that she stand aside until her legal difficulties are resolved," he said.
"This is about doing the right thing and the appropriate thing to preserve the credibility and integrity and shareholder value in a majority government-owned SOE."
Dame Jenny's lawyer, Michael Arthur, said yesterday that Mainzeal's liquidators were seeking damages and it would take weeks to review the claim.
But he said she strongly denied the allegations and the claim would be vigourously defended.