The National Gallery of Australia is continuing to display a $5m statue of a dancing Shiva, despite it being identified as a stolen artefact that came from a temple in India in 2006.

The 900-year-old Shiva Nataraja statue was identified by a New York court as being one of two bronze statues looted from the Sivan temple in the Ariyalur district of India and sold through the office of the art dealer Subhash Kapoor, News Corp Australia reported.

Kapoor is being held in India, accused of masterminding a network of antique looting valued at about $100m.

This month Kapoor’s office manager, Adam Freedman, pleaded guilty in New York supreme court, admitting to creating fake documents and arranging shipping of a number of artworks – including a "$5m Shiva for Australia" – he knew had been stolen from around Asia and the Pacific.

An 11th-century bronze statue was removed from display by the Asian Civilisations Museum in Singapore after they learned it was stolen from the temple.

The Art Gallery of New South Wales, after discovering one of the six antiquities bought from Kapoor were also stolen, listed all items bought from Kapoor for easy identification by claimants.

The NGA has launched legal proceedings against Kapoor. The gallery has purchased 14 items from him in the past.

It also said it was in talks with the Indian high commission “to discuss avenues or restitution”. Under international treaties stolen artefacts must be returned.

Before it was established in November that Shiva Nataraja had been stolen, the NGA said that should it be confirmed it would consider itself a “victim of fraud”.

An NGA spokeswoman would not comment but did confirm that the statue remains on display.