The Tories last week refused to discuss claims that Christopher Moran was one of a number of secret lenders repaid £5m to ensure their anonymity.
But Francis Maude, the party's chairman, denied it was embarrassed to be associated with the tycoon, once expelled from Lloyds for "discreditable conduct". Mr Maude revealed that Mr Moran is about to be made a director of C&UCO Properties Ltd, the party's property arm bidding for the freehold of its former HQ in London's Smith Square.
The chairman said he was "puzzled" at suggestions that the party was embarrassed at its association with Mr Moran.
Mr Maude said: "He has been associated with the party for a long time and he's held dinners for the party in Crosby Hall [his Chelsea home]... I don't think it's wrong that he should be associated with us."
The Electoral Commission has asked for details of the party's secret lenders. It will then decide whether to release the names. If the loans were not made on purely commercial terms the lenders must be outed.