UN secretary-general Kofi Annan said he was "disappointed" at news his son was receiving payment from a firm involved in Iraq's oil-for-food programme.
Mr Annan admits the revelations will not help the UN's image
It has emerged Kojo Annan was paid by Swiss-based Cotecna for four years longer than previously believed.
Cotecna said it was to stop him setting up in competition in West Africa, where he had been based with the company.
The firm had a contract with the UN's Iraqi oil-for-food programme, which is currently under investigation.
Both the UN and Cotecna have stressed that Kojo Annan's work was focused entirely on operations in Nigeria and Ghana and had nothing to do with the Iraq programme.
The UN previously stated Kojo Annan stopped working for Cotecna in 1999.
Kofi Annan said he was "very disappointed and surprised" at the revelations that his son continued to receive payment from Cotecna until February 2004.
He said he understood payments had stopped by 1999, "and I had not expected that the relationship continued".
"Naturally, I have warm, family relations with my son but he is in a different field," Mr Annan went on.
"He is an independent business man. He is a grown man, and I don't get involved with his activities and he doesn't get involved in mine".
Mr Annan acknowledged that the revelations would not help the perception of "conflict of interest and wrongdoing" currently facing the UN.
He has set up an independent panel to investigate allegations of corruption in the UN's Iraq oil-for-food programme, which allowed Baghdad to sell oil in exchange for civilian food and supplies.
It is alleged that Saddam Hussein's regime managed to siphon off billions of dollars through the programme.
Lawyers for the younger Mr Annan told the panel on Friday that he continued to receive payments from Cotecna until February 2004, said UN spokesman Fred Eckhard.
Mr Eckhard said the payments were "nothing illegal", and were part of a no-compete contract, which allows firms to pay ex-employees to stop them setting up in competition.
A Cotecna spokeswoman said Kojo Annan was paid $2,500 (£1,310) a month "to prevent him from working for any of their competitors in Africa", which she described as a very competitive market.
"Kojo Annan's sole responsibilities were in Africa. He had nothing to do with the UN discussions and work", she was quoted by the Associated Press as saying.
Cotecna was hired by the UN between 1998 and 2003 to check and approve goods entering Iraq as part of the oil-for-food programme.
Kofi Annan reiterated on Monday that he had "no involvement with the granting of contracts, either on this Cotecna one or others".