Steve Crow is free to run a business after the government department which decided he was banned admitted getting it wrong.

Porn baron Crow was banned from running a company after the collapse of four of his businesses in 2010.

READ MORE: Return of the (porn) king

Then he pleaded guilty to being involved in the management of a business while banned the following year.

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When Crow emerged leading a cavalcade of topless people on motorbikes, the Ministry of Business Innovation and Employment declared him to be in breach of a legal order which imposed a new five-year ban after his 2011 conviction.

The renewed ban threatened to overturn Crow's planned return to business.

At least, until the ministry admitted it got it wrong.

A spokesman told the Herald it had reviewed the legal position and worked out it got it wrong.

The new position came after it "sought advice from the Auckland Crown Solicitor around the effect of Mr Crow's conviction".

"Following consideration of that advice the ministry has come to the view that Mr Crow's conviction did not, in fact, result in a five-year prohibition" under the relevant section of the Companies Act.

The spokesman said the ministry got it wrong because of the change in law since Crow's conviction in 2011.

Under the current law, Crow would have been banned for another five years. As it was then, he did not accrue another five years.

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"We regret any confusion this has caused."