Dunedin police are still searching for a group of young girls who witnessed a man performing the indecent act in the dunes of St Clair Beach about 3pm on Saturday.
The girls alerted lifeguards of the St Clair Surf Life Saving Club to the man. The lifeguards then reported the matter to police.
A police spokeswoman said police spoke to a man nearby, but he was not believed to be a person of interest.
No-one else had been arrested in relation to the incident and the girls had not come forward.
Earlier on Saturday, police received a report a man in South Dunedin offered money to a young woman.
The spokeswoman did not elaborate on the incident.
Posts on social media warned people about a ``a guy walking around South Dunedin asking girls if they want to make a quick $50''.
The police spokeswoman confirmed the two incidents could be related.
Dunedin police (03) 471-4800, Crimestoppers 0800 555 111.
