Controversial Auburn deputy mayor Salim Mehajer has been suspended from office for four months after the NSW Civil and Administrative Tribunal found him guilty of failing to disclose all of his financial interests.
Mr Mehajer has been found guilty of failing to disclose his financial interest in a commercial building during a vote on changes that added $1 million to its value.
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The Auburn deputy mayor failed to disclose a pecuniary interest on three occasions between November 2012 and December 2013, the Civil and Administrative Tribunal NSW found on Friday.
Mr Mehajer would not be disqualified from civic office because he "did not intentionally commit the breaches", the tribunal finding said.
Auburn City Council was last week given 14 days to explain why it should not be suspended after the NSW government announced a public inquiry into the western Sydney council.
The inquiry is investigating allegations that some councillors misused their position to benefit themselves or their relatives.
Labor councillor George Campbell said he backed the investigation but urged Local Government Minister Paul Toole to spare innocent councillors.
"If necessary, suspend the council, but if possible suspend only those who are the subject of the inquiry," he told AAP.
"(He) needs to explain why it's not possible to suspend some councillors rather than all."
Councillor Tony Oldfield said the council's minority - known as the "poor four" - would put forward a separate submission to Mr Toole, arguing the suspension should apply only to the councillors under investigation.
But a spokesman from the Office of Local Government said legislation "only allows for the suspension of the full council and not individual councillors".
Mr Mehajer rose to fame after his lavish wedding in August last year.
The property developer is dealing with a string of legal battles, including charges of forging electoral documents to rig council elections in 2012.
If the council is stood down and amalgamated, Wednesday's meeting will have been the last in its 68-year history.
Just yesterday, Mr Mehajer was fined $200 after being caught driving a Ferrari without his licence on him.
But the Sydney councillor escaped conviction on charges of failing to register the luxury car before getting behind the wheel.