As Mr Piccoli revealed that allegations about the Glebe college have been referred to the Independent Commission Against Corruption, it emerged that the millionaire businesswoman was the co-host of a $1500 a head fund-raiser for former Liberal leader John Brogden, held at her Drummoyne apartment in 2004 with a guest list that included former MP Peta Seaton and one-time property developer Rodric David.

Ms Houssein-Mustafa was a fund-raiser for both the Liberal and National parties, a skill she learnt through a personal connection with the Italian Chamber of Commerce and Industry, previously headed by disgraced businessman Nick Di Girolamo.

Her legal political donations came to light on Tuesday during a heated public hearing into state budget estimates with Mr Piccoli questioned over his attendance at a cocktail party hosted by Ms Houssein-Mustafa while he was in opposition in 2010.

Records show Ms Houssein-Mustafa's company, MHM Australasia Pty Ltd, which trades as the Australasian College Broadway, made a legal donation of $15,000 to the National Party on December 23, 2010.

MHM Australasia Pty Ltd donated a further $1500 to the party in June 2011.

A source close to the case described the cocktail party at Ms Houssein-Mustafa's apartment as more of a networking function than a fund-raiser, attended by Mr Piccoli and a small group of staff from the college, which specialises in hairdressing and beauty therapy courses.

Mr Piccoli was vague about his recollection of the evening when quizzed by Labor MLC Greg Donnelly, who pointed out that the college was now under police investigation.

Mr Piccoli initially said he was aware of the investigation through media reports – Fairfax Media first reported the case in April – but would have to check whether he had been formally briefed about it.

On Wednesday he revealed that fraud claims were first brought to his attention in September last year. The claims relate to allegations that the college was claiming state government subsidies of up to $10,000 a student for people who were never enrolled at the institution.

''Allegations of fraud at the Australasian College Broadway were raised with my office in September 2013,'' he said.

"My office promptly advised the Department of Education and Communities and I was made aware of the allegations. The department immediately commenced an investigation. It also notified authorities including NSW Police, the Independent Commission Against Corruption and the Australian Skills Quality Authority.''

ASQA's 2012-13 annual report shows that the college's application for renewal of registration was in doubt in 2012 but a spokeswoman for the college said it got the green light after meeting compliance standards.

"On this occasion, ASQA had requirements we needed to address in regard to our application,'' she said. "We did so immediately and our registration was renewed."

A spokesman for ASQA confirmed its investigation into the college was continuing but was unable to divulge the details of the 2012 action because of the present investigation.

Ms Houssein-Mustafa has denied the allegations against her.