South Australian mayor Andrew Lee has been cleared of misconduct over the sale of a winery, despite authorities stating he had “walked a fine ethical line”.

An investigation by the SA Ombudsman reviewed the role of the Mount Gambier mayor, who assisted in brokering a deal for the purchase of a Coonawarra winery by a Chinese company.

The ombudsmen took up the investigation after a referral from that state’s ICAC corruption watchdog.

“It was alleged that Mayor Lee had not paid commercial value for his share in the Rymill winery,” ombudsmen Wayne Lines said in his report.

Mr Lee was also alleged to have assisted in brokering that sale of the winery to Shandong-based company the Landbridge Group during a taxpayer-funded trip to China in April 2016.

“Mayor Lee maintains that his 5 per cent share in the winery is not a gift, but payment for the valuable consideration he provided in brokering the deal,” Mr Lines said.

Mr Lines said no evidence had been found to “establish that Mayor Lee conducted personal business” during the visit, or committed misconduct.

“Although Mayor Lee did send two emails from his mayoral account and inappropriately used his business card in his dealings ... these mistakes are not serious enough for a finding of misconduct,” Mr Lines wrote.

“As principal officer of his council, Mayor Andrew Lee walked a very fine ethical line dealing with the Landbridge Group as intermediary in a large commercial transaction.

“Given the language and cultural differences involved, and perhaps an incomplete understanding of the history of the deal on the part of some observers, it is not difficult to see why some in Australia have concluded that Mayor Lee's business dealings in the winery sale were suspicious.”

Mr Lines did call on Mr Lee to “examine and clarify any actions that may give rise to a perception that he is using his elected office for personal gain”.