The Fiji Sun reported that Raiwalui was also facing a charge of the unlawful possession of illicit drugs, including cocaine, which was also dropped.
Police have now re-opened the case, a spokesperson told Fiji Village.
There was no confirmation yet on whether the same man who was charged earlier would be investigated, the outlet said.
Farsani was found with stab wounds, dumped in front of the Colonial War Memorial Hospital in Fiji in May last year.
In the wake of his death, good friend Jason Ekeroma described Farsani as having "the biggest heart for his family and friends", especially for his 3-year-old son Cyrus.
Farsani grew up in Mt Roskill and played rugby for the Marist Saints, Ekeroma said.
He studied to become a dentist in Dunedin before becoming interested in selling taro and starting a business in Fiji.
"He always had a business sense. Ash always had love for everyone, was always there when we needed him. You know you'll count on him being there, that's a fact.
"Intelligent and funny as hell, he was never one to back down from a challenge. Those who know him know that."
Ekeroma said Farsani would be dearly missed by many.
"He didn't deserve to die this way."