Jeremy Hunt has apologised after it was discovered he may have breached anti-money laundering law when he didn't disclose the purchase of plush flats on England's south coast.
Labour said it would be referring the health secretary to the standards commissioner "to look into this serious breach".
Hunt said his failure to declare a business interest with both Companies House and the parliamentary register of MPs' interests was down to "honest administrative mistakes" and that he did not gain financially as a result.
The Surrey based MP took six months to notify authorities of his 50% interest in Mare Pond Properties Limited.
He also did not inform the parliamentary register of members' interests of his share in the business within the 28-day time limit, according to the Daily Telegraph.
Since 2016, anti-money-laundering rules have said failing to declare a "person with significant control" within 14 days can lead to a fine or two years' jail.
It is claimed Hunt set up the company with his wife Lucia Guo to buy seven properties in the Ocean Village development in Southampton on February 7.
A spokeswoman for Hunt said: "These were honest administrative mistakes which have already been rectified.
"Jeremy's accountant made an error in the Companies House filing which was a genuine oversight.
"With respect to ministerial and parliamentary declarations, the Cabinet Office are clear that there has been no breach of the ministerial code.
"Jeremy declared the interest to them after the company was set up.
"They advised that as it was a shell company with no assets or value, it should only be registered when it became operational.
"As such, Jeremy presumed the same rules applied to Parliamentary declarations.
"Although there was no personal gain involved, Jeremy accepts these mistakes are his responsibility and has apologised to the parliamentary authorities."
Labour’s Shadow secretary for the Cabinet Office, Jon Trickett, said the health secretary shouldn't be let off the hook.
"It appears Jeremy Hunt has taken part in illegal activity in his failure to declare his involvement in a luxury flat investment.
"This is simply unacceptable and especially so given the secretary of state's position at the heart of Theresa May's government.
"Labour will today refer Jeremy Hunt to the standards commissioner to look into this serious breach.
He should have had the decency to refer himself rather than sweep this under the carpet," he said.
A Downing Street spokesman said: "Jeremy has rightly apologised for an administrative oversight, and as the Cabinet Office have made clear there has been no breach of the ministerial code.
"We consider the matter closed."
The revelation comes as Mr Hunt is in Tokyo, Japan, where he is set to attend the Patient Safety global ministerial conference.