The Overseas Investment Office (OIO) says it is satisfied due process was followed when it allowed two Argentinian brothers to buy a large north Taranaki farm.
The OIO has been reviewing a 2013 consent application by the company Ceol & Muir of which brothers Rafael and Federico Grozovsky own 100 percent of the shares.
It was the company's links to Panamanian law firm Mossack Fonseca that originally prompted the OIO to review the 2013 consent.
Mossack Fonseca has been at the centre of an international scandal when a leak of confidential documents revealed its role in helping people hide money and avoid taxes.
In a statement issued yesterday the office said it looked closely at the bona fides of the people who will control the investment in the Taranaki farm - in this case the Grozovsky brothers.
However court documents and media reports from 2011 and 2012 show a Buenos Aires tannery owned by the brothers leaked excessive levels of chemicals into a nearby river.
In a statement released today, the OIO said there was no evidence to suggest Ceol & Muir's connection with Mossack Fonseca was in breach of any laws.
But Labour MP David Cunliffe said questions remained over whether the OIO knew about the poor environmental history of the brothers.
Mr Cunliffe told Morning Report answers were needed from the OIO.
"So the question is why do they think these folks are of good character when environmental concerns are part of our test?"
For the consent in 2013 the OIO received a statuatory declaration that the applicants were of good character.
It said this in the 2013 consent:
"The Applicant has provided statutory declarations stating that all individuals with control of the relevant overseas person are of good character. The OIO is satisfied that the stauatory decalrations can be relied on as they comply with the requirements of the Oaths and Declarations Act 1957. We have also conducted internet searches for any adverse information on those individuals and found nothing relevant.
"Therefore, the OIO is satisfied that the individuals with control of the relevant overseas person are of good character."
Read the OIO's decision of December 2013 (43 pages)
The consent requires the purchasers to remain of good character and to report annually to the OIO until 2022 - it received its second annual report in February this year.
The OIO said in a statement today: "These reports show that fulfilment of some conditions has been delayed and the OIO is following this up with Ceol & Muir as the OIO is not content with progress made. The conditions relate to improvements to the property that the consent holder undertook to implement."
The OIO is following up with the company on those unfulfilled conditions.