Football regulator says Manchester City owner could be forced to sell if verdict stands

Manchester City's owner could be required to sell the club if its financial rules verdict is upheld and the Independent Football Regulator finds grounds to act, the watchdog's chair, David Kogan, said in comments reported on 21 October. City has appealed the independent commission's verdict, and Kogan said it was premature to decide whether his regulator would investigate.

Kogan told The Rest Is Football podcast that the regulator can ask an owner to step away if it believes a club has been run without fitness, fairness or propriety, according to The Independent. Asked whether an owner could refuse to divest, he said: “No, no, no. We've got absolute power to do so.” His description concerns a power the regulator may use; he announced no decision to use it against City.

Why the Manchester City verdict matters to the regulator

City argues the commission's decision contains “material errors, of law, principle and fact and is unsafe”, the BBC reported. Kogan said he would wait for questions about the case to be answered before deciding whether the football regulator should mount its own investigation. He described prejudging that decision as a “colossal mistake”.

Separate accounting inquiries into Manchester City

The Financial Reporting Council, the UK's audit regulator, is separately making inquiries into accounting issues at City. It took over regulatory consideration of the case from the Institute of Chartered Accountants in England and Wales on 30 September, according to a letter to a House of Commons committee reported by the BBC. No formal FRC investigation had begun at the time of that report.

The BBC reported that the commission found City had given its auditors a misleading impression of arrangements concerning the origin of shareholder funds, leaving them unaware of the scheme. The FRC can examine whether auditor BDO's work met applicable rules and can sanction people within its remit, including club directors or employees who belong to professional accountancy bodies. BDO declined to comment to the BBC.

Liam Byrne, chair of the Commons business committee, said the FRC's letter exposed gaps in its ability to compel evidence from City and pursue directors outside its disciplinary rules. He called on the government to explain why reforms to address those gaps had been abandoned and what it would do to strengthen accountability.