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According to AAP, the alleged misconduct was in relation to the spending of grant funding in his Kairuku-Hiri electorate in 2002.
In a statement, Avei strongly denied any wrongdoing and said he did not consider it necessary to stand down while the case was being investigated by the public prosecutor.
“If I believed for one minute my continued presence in the Ministry would be harmful to the Government, or the nation, at this time, I would not hesitate in taking a different approach,” Avei said.
“If, however, the Public Prosecutor decides to make a referral then I will automatically stand aside from all my public offices while the matter is determined by a tribunal.”
AAP reported that a leadership tribunal, comprising of three judges, could be assembled to hear the case if deemed necessary by the Public Prosecutor. The tribunal has the authority to demote ministers, cut their salaries or eject them from politics for up to three years if they are found guilty of misconduct.
The latest allegation of misconduct comes less than a week after the shock resignation of the National Planning and Monitoring Minister, Arthur Somare, who is also the son of PNG Prime Minister Sir Michael Somare.
“Following my referral by the Ombudsman Commission to the Public Prosecutor, I have taken a decision to step aside from all my executive duties and responsibilities as minister,” Somare said in a statement last week.
Health Minister Melchoir Pep was also referred to the Public Prosecutor last week for alleged misconduct.
