Federal Police have been asked to investigate the government agency which controls more than $10 billion worth of defence housing, sparking fresh concerns in the military about the future of the organisation.

Key points: Former DHA boss Peter Howman baffled by Finance Department's move

Former DHA boss Peter Howman baffled by Finance Department's move Senior military figures believe some inside Government pushing to privatise DHA

Senior military figures believe some inside Government pushing to privatise DHA Government insists it has no plans to privatise agency

Defence Housing Australia (DHA) hit the headlines late last year when the ABC revealed its then managing director, Peter Howman, had suddenly resigned.

The ABC has now confirmed the Finance Department has asked the Australian Federal Police (AFP) to investigate the organisation, but it is unclear what has prompted the request.

"The Department of Finance has referred a matter concerning Defence Housing Australia to the AFP," a spokeswoman for the Finance Department said.

"As this matter is the subject of ongoing AFP process, it would not be appropriate to comment further."

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The AFP would not give any details concerning the matter.

"The AFP can confirm receipt of a referral from the Department of Finance concerning Defence Housing Australia," the AFP said in a statement.

"As this matter is currently under evaluation, it would not be appropriate to comment further."

But Coalition frontbencher Josh Frydenberg said the Government was not planning to privatise DHA.

"Look, we have no plans to privatise Defence Housing, and as for investigations by the AFP, that's a matter for them," he said.

Acting Opposition Leader Tanya Plibersek declined to comment on the possibility of federal police investigating the defence housing agency.

"I think we just need to see where this goes, I'm not going to make any comments at this early stage," Ms Plibersek said.

Mr Howman "was moved on because he was so good at resisting the argument to privatise or asset strip it," said Neil James from the Australia Defence Association. ( Dept of Defence: ABIS Dove Smithett )

Former DHA boss Peter Howman said he was baffled by the Finance Department's move on the agency.

"From what I understand, the statement from the AFP and Department of Finance is referring to Defence Housing Australia — it's not referring to myself, and it's really a matter for DHA to respond to, not myself and the Department of Finance and the AFP, and I wouldn't want to get involved with any discussions they may be having," Mr Howman said.

Senior figures in the military said they believed some inside the Federal Government were pushing to privatise DHA, which manages a real estate portfolio worth more than $10 billion.

At present, the organisation's two major shareholders are the Department of Finance and the Department of Defence.

Defence Association against DHA privatisation

Neil James from the Australia Defence Association said privatising the DHA would be a very negative step.

"As the Chief of the Defence Force has made quite clear, and indeed so has the Secretary and the Minister — DHA should not be privatised," Mr James said.

"This is not a common Government-business enterprise — this is a vital defence capability enabler and one of the reasons why Peter Howman was moved on was because he was so good at resisting the argument to privatise or asset strip it."

DHA chairman Sandy Macdonald said he had "nothing further to add to the statements made by the Australian Federal Police and the Department of Finance".

The Federal Government insists it has no plans to privatise DHA.