The Minister in charge of Christchurch's rebuild said he was first informed of potential conflicts of interest at CERA the day before the story broke.
Under investigation: Murray Cleverley. Photo: South Canterbury District Health Board
Three staff members from the now defunct authority face multiple investigations over allegations they tried to use their positions for personal financial gain.
They have been accused of trying to arrange property deals through their own company for a finder's fee.
The employees have either stepped down, or been stood down, from their new government roles.
They are Murray Cleverley, who was a chairman of Canterbury District Health Board, and Gerard Gallagher and Simon Nikoloff, who were both with the rebuild entity Ōtākaro Limited.
Minister Supporting Greater Christchurch Regeneration Gerry Brownlee said one of his staff members told him about the allegations the day before the story broke.
"Remember it was a Friday afternoon, and Monday was a holiday - it was Auckland anniversary day - so there was no Cabinet here, but by Tuesday morning two of the gentlemen were stood down and the Health Ministry was looking at the third person and their continued role there."
Mr Brownlee said he had no tolerance for fraudulent or corrupt behaviour.
The State Services Commission was helping an investigation led by the Department of Prime Minister and Cabinet, but has since appointed Former Solicitor-General Michael Heron QC to conduct a separate inquiry, which would cover the men's actions in subsequent government roles.
An interim report will be given to the State Services Commission by the end of February.