A woman who made tens of millions through contracts with Te Wananga o Aotearoa while her father was the boss was put forward by the Maori King as his representative on the institution's governing body.
But Susan Cullen, daughter of founder and former head Rongo Wetere, was rejected by the Wananga council as it believes her past association would have a negative influence, the Herald understands.
It has asked King Tuheitia for another nominee - and as a result, his office is calling for wananga chairman Richard Batley to resign, and Mrs Cullen is threatening court action.
Mrs Cullen told the Herald in 2005 she went from making $30,000 a year to being a multimillionaire in a year.
Companies she owned earned more than $74.2 million in five years from educational contracts with the institution.
The interview came days before an Auditor-General's report into the institution found frequent and extensive conflicts of interest.
Mr Wetere resigned from his post soon after, following government pressure.
A statement issued by the Wananga said at the time that "all legal proceedings between the council, Dr Wetere and others have now ended," indicating that it would not pursue him for recovery of any questionable spending.
Mrs Cullen said yesterday that she had held a warrant from Tuheitia since June 1 to be his Kingitanga representative on the governing council.
The Wananga reserves a place for a Kingitanga representative, as set out in its constitution.
But she was asked to leave a meeting on June 27, and was told a review of the numbers on the council was being made.
Mrs Cullen said legal advice to the council was that it had no grounds to reject the nomination in violation of the wananga constitution.
Asked if she accepted that her appointment might cause some embarrassment, Mrs Cullen said she wanted to "give back".
"I've been very successful in my businesses ... and I really am grateful to serve the king.