The Government's flagship regional development programme has been linked to a businessman referred to the fraud watchdog.

One of the initial projects announced during the launch of the government's $1 billion-a-year fund for development in the regions on Friday was a $350,000 grant to look into creating a waste-to-energy plant in the West Coast.

But it's been revealed one of the major shareholders in the company behind the plan - Renew Energy - was referred to the Serious Fraud Office last year.

Last year Gerard Gallagher and another official at the Canterbury Earthquake Recovery Authority were the subject of an investigation by the SSC into private property deals they were doing while working for the authority. The SCC referred the pair to the SFO as result.

At the time, Gallagher said the government bosses knew about their businesses and had failed the pair by not advising them about potential conflicts of interest.

"In fact, CERA hired us because they needed our extensive private business networks, knowledge and commercial expertise," they said in a statement.

According to the companies office, Mr Gallagher is no longer a director of Renew but still owns about a quarter of its shares.

He told Radio NZ on Wednesday the SFO had never investigated him and that the situation had been resolved.

A spokesman for the SFO said the matter had been referred to the department but that he could not comment of specific investigations.

Comment has been requested from Regional Economic Development Minister Shane Jones.

He told RNZ he was seeking urgent advice from officials.

"I don't want to say anything about the individual until I've taken a legal briefing for fear of myself being embroiled in legal action," he said.

- NZ Newswire