Carson Yeung can remain in control at Birmingham even if found guilty of five charges of laundering money amounting to £59million, Press Association Sport understands.
Yeung has been released on bail of £558,000 until the next hearing in his native Hong Kong, which is scheduled for August 11.
In addition, Yeung has been ordered to surrender his travel documents and report regularly to police.
The shares of City's parent company, Birmingham International Holdings, have been suspended.
If the charges against him are proven, Yeung would have to stand down as a director of the club under the "fit and proper persons" test which is part of Football League regulations.
But he would be able to stay at the helm as the majority shareholder with a 26% stake in Birmingham.
A Football League spokesman told Press Association Sport: "The Football League are monitoring the situation. We can't comment further than that."
Yeung was granted bail after appearing in court yesterday to answer alleged offences which took place between 2001 and 2007 - two years before he took control at St Andrew's.
Acting City chairman Peter Pannu insists Birmingham are in a sound financial position after flying to Hong Kong yesterday for talks with Yeung.
Pannu is adamant that there is no connection between the charges against Yeung and the midlands club.
He said: "I've had it explained to me that the charges relate to the 2001-2007 period.
"That is two years before Carson invested in this club so there is no connection there. The finances are okay."
Pannu has tried to allay the fears of supporters after another setback following relegation from the Barclays Premier League and the loss of manager Alex McLeish to local rivals Aston Villa.
He said: "The fans have nothing to worry about. Understandably the fans are worried about this.
"But this has got nothing to do with the club and there is no impact on the operations over here.
"I've spoken on a couple of occasions to Carson and his lawyers and they've assured me there is no link whatsoever."
Yeung bought a 29.9% stake in City in summer 2007.
He took full control of the Carling Cup winners midway through the 2009-2010 season in an £81million takeover from David Sullivan and David Gold.Reuse content