The Serious Fraud Office has commenced an investigation over donations made to the Labour Party in 2017.

However, it is remaining tight-lipped over its details.

Labour Party president Claire Szabo told the Herald in a statement: "We have not been advised of the specifics of the inquiry, however the Labour Party will fully cooperate with any SFO investigations."

"We will not be issuing any further statement while the investigation is underway."

In February, however, Szabo confirmed two men - brothers and businessmen Shijia (Colin) Zheng and Hengjia (Joe) Zheng - who were then being investigated by the SFO and had made donations to the National Party, had also made donations to Labour.

Hengjia Zheng's $10,000 donation came through buying a piece of art at a silent auction in 2017, while Shijia Zheng donated $1940 in 2018.

Szabo has said the donations were appropriately filed in accordance with the rules.

The Zheng brothers have since been criminally charged by the SFO, alongside independent MP Jami-Lee Ross and New Zealand Order of Merit recipient Yikun Zhang over allegations relating to National Party donations.

The minister responsible for the SFO, Stuart Nash, told Heather Du Plessis-Allan on Newstalk ZB this evening he was blindsided by the agency's announcement.

"I read about it in the media and thought 'goodness me'. I had no indication whatsoever that anyone was looking to investigate us, so I don't know who has lodged a complaint with us but, you know, time will tell.

"It would be inappropriate for me to comment any further, if in fact I could, but I can't."

The Labour Party investigation, the SFO said in a statement this afternoon, was also not an indication of guilt.

"In order to commence an investigation, the Serious Fraud Office Act requires that the director [of the SFO] must have reasonable grounds to believe that a relevant offence may have been committed. The director does not have to be satisfied that an offence has been committed," it said.

However, the SFO would not comment further on the investigation.

The SFO did reiterate it is presently conducting four investigations over electoral funding allegations, which include a probe into the New Zealand First Foundation and two separate investigations into the Auckland and Christchurch mayors' expenses.

"We consider that making the current announcement is consistent with our past practice in this area of electoral investigations and in the public interest," SFO director Julie Read said.

In the interests of transparency and consistency, the SFO announced the commencement of all these investigations, she added.

Electoral law expert Andrew Geddis, from at the University of Otago, told Newstalk ZB this evening the Labour Party has a history of using auctions to drum up money.

The potential problem, he said, was the payment chain.

"You have got someone who gives an item, which is worth some money, and then you have got someone who at auction bids on it and buys it for another sum of money.

"And the question then is: Who is making a donation to the party at what point?"

Geddis said it was possible the Labour Party has been using this to be "a bit squiffy" about who the money, or where value, was coming from.

Even if there is no illegality, Geddis said, the way in which auctions are used by political parties has become problematic.

"There is so much wiggle room that the parties have used it to give the information they want to give.

"Frankly, I don't care if a local artist gives their painting to the Labour Party, that's fine... what I want to know is if some very wealthy person has paid $80,000 for that painting and that money is then going to the Labour Party to run their campaign.

"As it happens, that sort of information doesn't appear to have actually made it through to the Electoral Commission for the public to see."

Geddis added there was virtually no chance the Labour Party investigation would be wrapped up before the election.

"[The SFO] are busy but hopefully they get through enough of it, so we can have some information before we vote."

The SFO has said it will make a decision before September's general election on whether to lay charges in relation to the New Zealand First Foundation, which has been bankrolling the New Zealand First Party.

It has also said the investigations over donations made for the Auckland and Christchurch mayoral elections came from separate referrals from police about Auckland Mayor Phil Goff's election expenses and Christchurch Mayor Lianne Dalziel's expenses.

The allegations against the ex-Labour ministers are over the use of auctions to allegedly hide the identity of the donor, Geddis told Newstalk ZB today.

A fifth recent investigation over donations led to the charges against Ross and the three businessmen.

Last week, Ross, Zhang, and the Zheng brothers appeared in the High Court at Auckland after their case was transferred from the District Court to the higher jurisdiction.

The former National Party MP and trio of businessmen have all denied the charges against them over allegations about two $100,000 donations to the National Party.

The investigation was prompted by Ross going public with allegations against then-National leader Simon Bridges, which Bridges has adamantly denied. Ross then laid a complaint with police, sparking the SFO inquiry and his charges.

"I was the whistleblower. I still consider that I was right to raise the concerns," he told media after his first court appearance. "There is no own goal."

Charging documents against the group allege two donations of $100,000 in 2017 and $100,050 in 2018 were made "in circumstances where the identity of the donor was not disclosed in the National Party's Annual Return of Party Donations".

"The defendants adopted a fraudulent device, trick, or stratagem whereby the 2018 donation was split into sums of money less than $15,000, and transferred into the bank accounts of eight people, before being paid to, and retained by, the National Party," the SFO alleges in the documents.

The same allegation is made by the SFO for the 2017 donation.

A trial has been set for the National Party case in September next year.

Meanwhile, the SFO, which normally gives little away, said in April its investigation into the New Zealand First Foundation faced challenges because of Covid-19.

"The SFO's pre-lockdown timetable for the investigation in relation to the New Zealand First Foundation would see us completing the investigation before the September election date," Read earlier said.

"At this stage, we are progressing the investigation under the current lockdown restrictions and are still on track to complete it within that timeframe."

The SFO offices had been closed during the pandemic and the entirety of its workforce had been working from home rather than conducting face-to-face meetings.

In February, the Electoral Commission said it believed the New Zealand First Foundation had received donations which should have been treated as party donations and had referred the matter to police to investigate.

The police referred it on to the SFO on February 11 and a week later the SFO launched a formal investigation.

Documents seen by RNZ revealed donations from entities connected with some of the country's wealthiest business people had been made in amounts just under the threshold at which the donors' names would normally be made public.

NZ First leader and Deputy Prime Minister Winston Peters has distanced himself from the foundation and has always denied any wrongdoing after it first came under scrutiny in November last year.