Manchester City faces possible ownership action as appeal and accounting review continue

Manchester City’s owners could be forced to sell the club if England’s Independent Football Regulator concluded that they had operated it without fitness, fairness or propriety, the watchdog’s chair has said. David Kogan stressed that it would be premature to discuss action while City appeals a major financial verdict. Kogan told the podcast The Rest Is Football that the regulator had “absolute power” to require an owner to step away if it considered the circumstances serious enough.

Asked whether an owner could refuse to divest, he replied: “No, no, no. We’ve got absolute power to do so.” His comments do not amount to a finding against City by the IFR. Kogan said the regulator had not decided whether to open its own investigation and that it would first need to see questions arising from the case answered.

He described any attempt to prejudge the matter as a “colossal mistake”. City has appealed against the independent commission’s ruling on Premier League financial charges. The commission found that the club had used what it called “sham” commercial arrangements over a nine-season period to inflate revenue or reduce costs by more than £900m.

The commission also found that City made “concerted efforts” to stop or frustrate the Premier League’s investigation. The club rejects the ruling, saying the decision contains “clear material errors, of law, principle and fact” and is unsafe. A separate regulatory development concerns the club’s accounts.

The Financial Reporting Council said in a letter to the House of Commons business committee that it assumed “regulatory consideration” of the matter on 30 September, taking it over from the Institute of Chartered Accountants in England and Wales. The FRC has not opened a formal investigation. The BBC reported that it was making preliminary enquiries after examining the independent commission’s findings.

Those enquiries could include whether City’s auditors, BDO, complied with accounting rules and whether individuals connected with the club fall within professional disciplinary systems. The commission found that City had given auditors a misleading impression about a scheme used to disguise the source of shareholder funds, leaving them unaware of the arrangement. The reports do not say whether the FRC will ultimately bring charges or impose sanctions.

City is majority-owned by Abu Dhabi United Group, an investment vehicle owned by Sheikh Mansour bin Zayed Al Nahyan. Kogan has pledged to resign if political interference affects a possible IFR investigation, amid concerns that scrutiny could create diplomatic difficulties between Britain and the United Arab Emirates. Liam Byrne, chair of the business committee, said the case exposed weaknesses in the regulator’s ability to obtain evidence and hold some directors to account.