Manchester City is facing a fifth investigation after the UK audit regulator said it is examining alleged irregularities in the club's accounts. The Financial Reporting Council (FRC) confirmed in a letter to the House of Commons business select committee that it had taken over 'regulatory consideration' of the case from the Institute of Chartered Accountants in England and Wales.
No formal investigation has started, but the Council has begun 'preliminary inquiries'. The move follows an independent panel's finding that the club 'filed misstated accounts and concealed the true states of its finances'.
Latest in a series of probes
City is awaiting sentencing after the independent panel judged it breached funding rules by arranging 'sham' contracts to secretly pump almost £1bn into its coffers over nine years. The club has also come under scrutiny after Greater Manchester Combined Authority lent £55m of taxpayers' cash to three property firms controlled by City's owner, United Arab Emirates vice president Sheikh Mansour bin Zayed al Nahyan.
Separately, the Tories and Reform UK want to know why two hospitality dinners that ex-Greater Manchester mayor and now-PM Andy Burnham had with club chairman Khaldoon Al Mubarak were not disclosed by the local authority. The Independent Football Regulator has also said it will probe whether City's owners are 'fit' and 'fair' to run a club, and could remove them.
Auditor scrutiny
The FRC will consider if the club maintained accounting standards. Though it routinely oversees larger institutions such as listed public companies, it does not usually look into football clubs. It can examine the conduct of City's auditors BDO to ask if their work was in line with the rules, and can apply sanctions to individuals such as directors or employees if they are members of professional accountancy bodies.
BDO is the UK's fifth-biggest accounting firm but claims to be a market leader in football, advising more Premier League and Championship clubs than any other company. The independent panel found City had given a 'misleading impression' of the scheme used to disguise the origin of shareholder funds injected into it to its auditors, who were reportedly 'unaware' of the scheme.
Appeal and response
City has appealed against the independent panel's ruling, which it says contains 'material errors of law, principle and fact and is unsafe'. BDO had not responded to a request for comment.
