Senator Scullion has requested an inquiry after Fairfax Media last month revealed legal concerns about a deal between the Western Desert Lands Aboriginal Corporation (WDLAC) and listed miner Reward Minerals, as well as alleged misuse of millions of dollars at a second Western Desert body recently liquidated by the Tax Office.

A spokeswoman for Senator Scullion said information provided by Fairfax Media had prompted his request to the Office of Registered Indigenous Corporations to investigate the matters raised and review previous audits of the two Western Desert entities.

WDLAC, which represents outback WA’s Martu people, has also launched its own probe into its affairs. It has engaged prominent WA barrister Peter Quinlan SC to examine its financial and governance procedures.

News of the inquiries comes as bank statements obtained by Fairfax Media show $973,771 was withdrawn from the account of the now-defunct Western Desert Puntukurnuparna Aboriginal Corporation in just 30 days in 2009.

Almost $100,000 in cash cheques was withdrawn and $264,000 spent at a Port Hedland car dealership.

Two directors of the defunct corporation at the time the money was withdrawn were Teddy Biljabu and Bruce Booth. Both men now sit on the WDLAC board.

Fresh information has also emerged about the controversial deal struck between the WDLAC and Reward Minerals to allow mining on a Martu sacred site.

Board minutes from August 2011 show WDLAC’s in-house lawyers recommended an ''external lead negotiator'' be hired to handle dealings with Reward Minerals in order to protect WDLAC executives from real or perceived conflicts of interest.

Other board minutes taken from April 2011 describe WDLAC chief executive Noel Whitehead as receiving an allowance to perform the role of "lead negotiator". The minutes also refer to a proposal to pay WDLAC directors, Mr Biljabu and Brian Samson, for “recognition of their work and participation as negotiators”.

The WDLAC lawyers' advice was not acted upon and external negotiators were not engaged. Reward Minerals later told the Australian Stock Exchange that it would pay WDLAC $650,000 to cover its survey and negotiation costs.

Mr Whitehead said in a statement that any allegations WDLAC executives or directors had received “secret payments” as a result of the Reward Minerals negotiation were “rejected out of hand”.

In another development, the board of a trustee company established to oversee millions of dollars in native title mining income on behalf of the Martu has revealed it has not received any mining agreement payments from WDLAC since June 2011.

A spokeswoman for Senator Scullion said ORIC needed to find evidence of illegal activity to launch prosecutions. “It is not enough that immoral behaviour has been carried out if it is consistent with the rules of the corporation and relevant legislation,” the spokeswoman said.

A long probe by ORIC into the defunct Western Desert entity resulted in no directors being referred to Commonwealth prosecutors on the basis evidence gathered might not be enough to secure convictions.