£20m land sale referred to Serious Fraud Office
This report is the subject of a legal complaint by the Regeneration Investment Fund for Wales
The spending watchdog has referred details of the sale of 16 parcels of publicly owned land to the Serious Fraud Office, BBC Wales understands.
The land was sold for about £20m but there are concerns it could have generated tens of millions more for the taxpayer.
The Wales Audit Office is focusing on the decision to sell the sites privately rather than a public auction.
The Welsh government has not commented but has defended the sale previously.
In March last year the parcels of land, situated across Wales, were sold to a Guernsey-based firm called South Wales Land Developments.
Instead of there being an open tendering process, 18 property agents and developers were approached and the sites were bundled together in one portfolio rather than sold individually.
The Wales Audit Office began an investigation last year.
Wales Audit Office
Mike Usher, Wales Audit Office group director, said: "After concerns were brought to our attention by an assembly member, the Auditor General for Wales decided in September 2012 to conduct a value for money study into the Regeneration Investment Fund for Wales.
"We subsequently announced an expansion of the terms of reference of this study in October 2012.
"Our fieldwork is now nearly complete, and has involved an extensive review of Welsh government and RIFW file documentation and a series of interviews with a wide range of individuals and organisations.
"Whilst our study is examining all aspects of RIFW, including its governance arrangements and its oversight by the Welsh government, we are also undertaking a detailed examination of all land disposal transactions and investment decisions.
"In particular, our auditors are looking at the RIFW decisions to sell land privately rather than by public auction."
The nature of the land varied from farms in Gwynedd to a former industrial site in the Cynon Valley and part of a business park in Newport.
But the area with the greatest value was 120 acres (49 hectares) of farmland near the village of Lisvane on the northern edge of Cardiff which had been in public ownership for many years.
The land was sold for an agricultural rate of around £15,000 an acre but four months later it was included in Cardiff Council's planning blueprint for new housing.
This paved the way for it to become some of the most valuable land in Wales with a potential price of around £1m an acre.
There is a clawback mechanism which means the taxpayer will be able to share in any increase in its value.
That figure has not been revealed but BBC Wales understands that it is not more than 50% of the increase.
Another valuable site is 16 acres of land (six hectares) on the outskirts of Monmouth which was valued by the Welsh government at around £1m.
Since the sale, a joint planning application has been made to Monmouthshire Council by South Wales Land Developments for 370 homes. No decision has been made yet.
And in the Bridgend area a stretch of land was valued at £100,000 near Pyle. Since then, an application has been made to Bridgend Council by South Wales Land Developments for 94 homes.
While there are clawback mechanisms in place for Lisvane and Monmouth, there are none applying to the other pieces of land.
Concerns over the method of the sale were first referred to the auditors by the Conservative assembly member Byron Davies.Providing money
The land had been in public ownership for many years having been bought by the Land Authority for Wales and the Welsh Development Agency before coming under the control of the Welsh government.
It was transferred by the Welsh government to an organisation called the Regeneration Investment Fund for Wales, or RIFW, in 2010 which operates at arms length but is still ultimately controlled by the Welsh government.
RIFW had been set up to invest in the regeneration of town centres and was funded by European and Welsh government money.
Instead of providing money, the Welsh government funds were generated by RIFW selling off 16 parcels of land for around £21m.
The Serious Fraud Office said it could "neither confirm nor deny" its involvement.
The Welsh government has already suspended the regeneration investment fund and launched two internal investigations.
There has been no comment from the Welsh government regarding the latest development.
In the past it has defended the sale, saying it was in excess of the independent market valuation and the land was bundled up to avoid developers cherry picking the best sites.
There has also been no comment from South Wales Land Developments but previously it said the deal had led to much needed commercial activity on the sites after years in which there was little.
Both claimed the use of clawback arrangements would reflect any significant uplift in the value of the land.