A staff member took a photograph of the deal but then superimposed a photograph of Liu over his vice-general manager to "show respect" to the general manager of the New Zealand company, as is protocol in China.
This photo was then given to Chinese media to publish but later added to the bundle of documents submitted for Liu's application for permanent residency in New Zealand.
Liu said he was unaware that the doctored photograph was part of his residency bid, which was also compiled by staff, and described the amendment as "obvious", "unsophisticated" and "done without guile".
"No attempt was made to camouflage" the change, he said.
The official who spotted the alteration showed Liu's immigration agent, Roy Mottram, and both agreed "it was so obvious that no one could be deceived by it", according to Liu.
Former National Party MP Warren Kyd was enlisted in 2005 to lobby Damien O'Connor, in his role as Associate Immigration Minister, to review the decision. He said Liu was unaware of the doctored photograph being in the Immigration file and there was no dispute that the business deal was legitimate, according to a letter obtained under the Official Information Act.
Immigration officials had rejected Liu's explanation and put the "worst possible construction on the facts" and clearly doubted he was a successful businessman, said Mr Kyd.
He visited Liu's businesses and home in Chongqing and told Mr O'Connor that he was "a man of considerable wealth by New Zealand standards" and there were "few companies in New Zealand which could achieve and finance these projects, let alone individuals".
Mr O'Connor accepted Liu's version of events but at first declined to intervene in the case, instead encouraging him to lodge another application for residence.
In a second letter to Mr Kyd, dated August 9, 2005, Mr O'Connor said: "It is not my normal practice to intervene in the established immigration application process, however, I have decided to make an exception in this case.
"I have directed the Department of Labour Immigration Service to waive the English language requirements for Donghua Liu for any forthcoming residence application."
A third letter to Mr Kyd, dated September 16, 2005 - the day before the election - said Mr O'Connor had considered the case carefully and "decided to intervene".
"I am therefore instructing the Department of Labour Immigration Service to grant residence to Mr Liu as an exception to policy."
The residency was granted under the investor category of the time.