Key Points:

A Chinese man granted citizenship against the advice of officials and wanted in his homeland for "large-scale misappropriation and embezzlement" was given a VIP citizenship ceremony at Parliament.

Yang Liu, also known as Bill Liu, was granted his citizenship in August by ministerial prerogative.

He became a New Zealander at a private citizenship ceremony in the Maori Affairs select committee room, officiated over by Labour MP and former Cabinet minister Dover Samuels.

Mr Samuels, who says Mr Liu and his family are personal friends and that he can vouch for him as "a good bloke", lobbied on his behalf.

The Department of Internal Affairs website says successful applicants for citizenship "are required to attend a public citizenship ceremony" which is "a very important step in the process of becoming a New Zealand citizen".

These are generally held en masse and officiated over by the local mayor. Mr Liu lives in Auckland.

Private ceremonies are sometimes allowed for exceptional reasons. Mr Samuels said he had no idea how Mr Liu made his fortune, but understood he was a businessman in China.

Documents leaked to Investigate magazine's Ian Wishart indicate Mr Liu was asked by New Zealand officials in March about a red Interpol notice, indicating an arrest warrant had been issued by Chinese judicial authorities, and also about as many as five passports with different identities.

Last year, Australia's Commonwealth Director of Public Prosecutions "repatriated" A$3.37 million it had frozen in bank accounts opened in the name of "Yang Liu" but operated by Yongming Yan, who the Australians said was wanted in China "for large-scale misappropriation and embezzlement offences".

A second report by Wishart last night claimed checks in China indicated Mr Liu's real name is Yongming Yan and that he used the alias Yang Liu to set up an identity in New Zealand, buy property, operate businesses and gain a New Zealand passport.

The report claimed an arrest warrant is current for "accounting frauds and embezzlement of a public company of between $167 million and $257 million".

Mr Liu was granted citizenship by Associate Immigration Minister Shane Jones standing in for Internal Affairs Minister Rick Barker, who excused himself because of a "perceived or actual conflict of interest".

Mr Barker didn't return calls last week but Prime Minister Helen Clark said the wives of the minister and Mr Liu were friends.

Mr Liu has been active in meeting politicians across the political spectrum. Labour and National have each acknowledged receiving donations of $5000 from him, and John Key said he recalled meeting him three times at functions but not since becoming Opposition leader.

National, Labour and Act candidates have held fundraising dinners at his Manukau restaurant, Jade Terrace.

Inquiries in the local Chinese community indicate Mr Liu arrived in NZ about 2002.

He lived for months at the SkyCity Hotel and was a high-stakes gambler at the casino.