Former Maori Affairs Minister Dover Samuels is calling on the Government to buy a controversial Far North island before it is sold to another private owner.

The Overseas Investment Office released its findings this month from a five-year investigation into the 2010 sale of Motukawaiti, the second biggest island in the Cavalli group off Matauri Bay and the only one in private hands.

The investigation found some evidence the purchase may have broken the law governing the sale of "sensitive" land to overseas buyers, but not enough to be sure of a successful prosecution.

Mr Samuels, who hails from Matauri Bay, described the report as a "whitewash" and questioned why it took so long to produce - despite frequent Parliamentary questions by MPs Shane Jones and Kelvin Davis.


More importantly, he wanted to know how the sale was possible in the first place.

"How did this transfer take place when we have a watchdog in place, the Overseas Investment office, which is supposed to scrutinise the sale of sensitive land?"

Mr Samuels said the local hapu, Ngati Kura, only found out about the sale when the new owners turned up to ask for access across Maori land.

Motukawaiti was the only island in the group of more than 20 that was in private hands.

The others were Maori land open to the public or, in the case of Motukawanui, DoC-administered land subject to a Treaty claim and possible future co-governance.

Mr Samuels urged the Government to buy the island and vest it as a reserve until Ngati Kura's Treaty claims were considered.

"If it's sold again it will be hard to get it back, to return to the customary owners or to the people of New Zealand," he said.

The 37ha island was sold for about $12 million in 2010 to New Zealand resident Wenning Han using a loan from Chinese businessman Jun Zhang, who later also became a New Zealand resident.

When Mr Han was unable to repay the loan two years later the island was transferred to Mr Zhang.

A few years ago it was for sale for $30 million via a firm specialising in private islands. The price is now listed as negotiable.

Tai Tokerau MP Kelvin Davis described the Motukawaiti controversy as a "murky episode".

"But the bottom line is that Ngati Kura have been dispossessed of their lands."