Papers relating to Mr Venables' controversial business dealings have been passed to the SFO following four separate inquiries by inspectors from the Department of Trade and Industry. As well as possible criminal proceedings, Mr Venables could face disqualification as a company director and questions over his position at the top of English national football.
The latest development comes as Mr Venables is braced for an investigation by the BBC's Panorama on Monday, which will make further allegations.
It is understood no decision has been made by the SFO on whether to launch a formal inquiry - it was given the latest evidence in the past few weeks - but it confirmed last night that officials are studying a thick dossier on the activities of Mr Venables' collapsed company Edennote, which was the vehicle for his involvement in the 1991 takeover of Tottenham Hotspur.
The SFO said yesterday: 'The DTI has referred its papers to the SFO in connection with Edennote and the matter is being considered.'
The possible fraud inquiry will be a further blow to Mr Venables who has been dogged by allegations about his business dealings since an extensive investigation by Panorama last year.
Last night, colleagues said Mr Venables was refusing to discuss the possible SFO inquiry. However, in a statement about the Panorama programme, he said: 'I find it astounding that a second programme has been authorised when the first one was so partisan and inaccurate.' He has always denied the claims made against him, to the extent of offering to give pounds 250,000 to charity if anyone proves them.
His business colleague, Eddie Ashby, who was also interviewed during an earlier official inquiry into the Tottenham deal, said: 'We were assured by the SFO three to four months ago that we were not being investigated and had been questioned only as witnesses. This is just part of an enormous tidal wave of allegation and innuendo caused because Terry had the courage to stand up to Alan Sugar.'
Mr Venables was appointed England coach in January after he had assured the Football Association that all his business dealings were above board. He satisfied the FA and was later told that a Metropolitan and City company fraud office investigation into allegations that he paid a pounds 50,000 'bung' to fellow manager Brian Clough to facilitate a transfer had been dropped.
The DTI's findings centre on Edennote. It was through the company that Mr Venables raised the pounds 3m he needed to buy a stake in Tottenham Hotspur as his part of the takeover bid with Alan Sugar, the Amstrad chairman. The two men subsequently fell out and Mr Venables was dismissed as Tottenham Hotspur's chief executive in May 1993. He then launched a legal action for unfair dismissal, which he called off a few months later.
The first Panorama documentary in September of that year alleged that Mr Venables had unlawfully raised a pounds 1m loan on the strength of the assets of a company from which he had already resigned as a director. The new Panorama allegations are thought to focus on three aspects of the Tottenham takeover and its aftermath, in particular how Mr Venables raised his stake and how Edennote's assets were distributed to its creditors when the company was wound up.
Last night, the England coach said in his statement: 'It is acknowledged by my employers, the Football Association, and every other body that has investigated me following the allegations made in the first programme that there are no grounds for censuring me and I find it ironic that, less than three weeks ago, the programme controller at the BBC officially offered me a four-year contract to remain with the Corporation.' He rejected the offer and signed with ITV.
Lawyers for Mr Venables issued a libel writ against the BBC in October last year, but that was allowed to lapse during the fraud inquiry. A fresh writ was issued on Thursday.
The BBC declined to comment last night.
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