The owner of the ill-fated Kiribati ferry says the ship's captain was told not to carry passengers, but set sail with 88 people on-board anyway.
Newshub has also learned that even when the vessel was permitted to carry passengers, its limit was 69.
- NZ, Australia and US search for Kiribati ferry survivors
- Air Force locates dinghy in hunt for missing Kiribati ferry
- NZDF joins search for missing Kiribati ferry with 50 passengers on board
The Air Force's P-3K2 Orion has been scouring the waters around Kiribati since Saturday.
Their search located seven survivors, but after 55 hours in the air, it's been suspended. More than 80 remain missing, feared dead.
"Mixed emotions, I think," said Flight Lieutenant James Arnott-Steel.
"We are thankful we found the seven survivors we did, but at the same time, a bit of a disappointment we were not able to find more people."
The ferry - the Butiraoi - broke apart and sank on January 18.
The owner of the vessel - Fijian Kirennang Tokiteba - told Newshub that the captain was informed a recent survey had found problems, but for some reason, passengers were allowed to board anyway.
"That's beyond our expectation, because we already informed the captain of that," he said.
"The marine surveyor spoke to the captain, regarding loading of passengers - that's the responsibility of the master of the vessel."
He told Newshub, in the days before the fatal voyage, the vessel ran aground, damaging its propeller shaft, but the captain failed to report the incident.
"The master doesn't want to report, because the vessel ran aground, and he didn't want to lose out on his job or like that, aye," he said.
Ieremia Tabai, MP for the island of Nonouti, where the ferry set sail from, wants an independent inquiry.
"There are rules and laws in Kiribati," he said.
"The problem - they are not followed or they are not enforced."
The vessel's trading licence was valid until the January 20 - two days after the tragedy occurred.
It states the passenger limit was 69. With five crew, the total number would be 74, but authorities say 88 people were recorded as being on board.
"Our heart goes out to the people of Kiribati," said Rescue Coordination Centre NZ watch leader Ramon Davis. "It is indeed a national tragedy."
The vessel's owner told Newshub that the ferry had two radios, and also an EPIRB or emergency locator beacon.
But that device, which could have saved so many lives, was never activated.