The APY Arts Centre Collective in South Australia is under investigation for potential criminal or civil charges following a six-month probe, The Australian reports.
In August, an independent review of the art in question had found that the paintings - set to showcase in Ngura Pulka - Epic Country at the National Gallery of Australia were without interference.
On Friday, SA Arts Minister Andrea Michaels revealed to The Australian that a panel which investigated the APY Arts Centre Collective, conducting over 200 interviews, found sufficient evidence to refer the matter to the Office of the Registrar of Indigenous Corporations (ORIC) and the Australian Competition and Consumer Commission.
"(The panel) couldn't compel witnesses, they couldn't offer whistleblower protection…but they found sufficient information to warrant them referring matters to these regulatory bodies," she said.
Announced initially in July, the panel consists of Megan Krakouer, Anne Sibree and Cameron Costello.
ORIC and the ACCC hold the authority to initiate both criminal and civil proceedings.
Additionally, ORIC possesses the capability to disband the board and appoint an administrator.
Supported by federal and NT counterparts, Ms Michaels appointed a panel to investigate allegations raised in a prolonged inquiry.
Both artists and studio staff asserted that non-Indigenous staffers had painted on Indigenous canvases to enhance the paintings' commercial value.
Serious concerns about ensuring a safe work environment for artists and staff, along with allegations of fraud, had also been raised.
Ms Michaels indicated that she would brief the Federal Arts Minister, Tony Burke, and her NT counterpart, Chansey Paech.
Ms Michaels told The Australian that she would not be making any recommendations to ORIC about appointing an administrator but "it is a power they have and they will probably look into that, I would imagine."
"The panel has determined that the level of information received warrants referral to relevant agencies."
If a new administrator is appointed, controversial manager of APYACC, Skye O'Meara would have to step down.
Ms O'Meara was adamant the collective will again be cleared, and has characterised the allegations as "an opening shot in a deliberate effort to destroy the collective and its significant artistic, cultural and economic achievements."
Despite calls for her resignation from Ms Michaels and various industry figures, Ms O'Meara has consistently declined to step down.
"In my view she ought to have stood down some time ago, but that is a decision for the board, as it was then," Ms Michaels said.
As per the panel's findings, participants overwhelmingly expressed a desire for a resolution to the matter and for the industry to progress.
"I commend the panel for their work conducting this review and their thorough engagement with artists and stakeholders including visiting arts centres and the APY Lands," Ms Michaels told the Australian.
Philip Watkins, CEO of Desart, the peak body representing 35 Indigenous arts centres in the central deserts, expressed the organisation's approval of the referrals made by the South Australian panel regarding the allegations against the APY Arts Centre.
"I reiterate my position that the senior management of the Collective should stand aside while these bodies carry out their investigations," Mr Watkins said.
"I look forward to a speedy resolution of these matters," he said.
