Federal Treasurer Joe Hockey says he has never received money from the company Australian Water Holdings (AWH), which is at the centre of a corruption inquiry in New South Wales.

Fairfax Media reported thousands of dollars were paid to a Liberal Party fundraising group for Mr Hockey's electorate, but were paid back when AWH attracted the attention of the Independent Commission Against Corruption (ICAC).

The North Sydney Forum, which raised political donations for the NSW Liberal Party, repaid $11,000 in February last year when concerns about AWH, a company connected to disgraced Labor figure Eddie Obeid, first emerged.

Following an inquiry from the ABC about a further donation made by AWH in 2009, Mr Hockey's office yesterday confirmed another $22,000 in political donations had been refunded.

In a statement released this morning, Mr Hockey denied any wrongdoing.

"Fairfax Media reports claiming that I received money from Australian Water Holdings or repaid money to AWH are factually wrong," he said.

"I have never received any money from AWH.

"I have never repaid money to AWH."

The ICAC inquiry has already claimed a ministerial casualty, with Liberal Senator Arthur Sinodinos standing aside as assistant treasurer until the hearing has finished.

Senator Sinodinos, a former director and chairman of AWH, will appear as a witness.

He denied any wrongdoing and said he would be "vindicated" after the ICAC heard he stood to gain up to $20 million from his involvement with AWH.

Senator Sinodinos will forgo his ministerial office and pay while he stands aside during the corruption inquiry.

Coalition figures insist the Senator has not been stood down from the ministry but has voluntarily stepped aside from the assistant treasurer's job.

Prime Minister Tony Abbott has defended his colleague, describing him as a "brave man" who will return to the frontbench "soon".