Sullivan and Brady angered by police probe

Karren Brady arrives at BirminghamCity yesterday (PA)

Birmingham City strongly asserted the innocence of Karren Brady, their chief executive, and David Sullivan, co-owner, yesterday. The pair were arrested and questioned for a reported five hours on Wednesday as part of Operation Apprentice, the City of London Police's ongoing investigation into corruption in football. Sullivan's home in Essex was also searched.

Yesterday, Birmingham, which is traded on the AIM market, asked for shares in the club to be suspended prior to the opening of trading. After issuing a 'clarifying' statement trading resumed in early afternoon. Shares, which were selling at 35.5p until the suspension, remained stable.

In a statement Birmingham City FC said: "We wish to clarify the situation regarding the City of London investigation. The City of London Police investigation is focusing on payments to a football agent and two players, dating back to 2002/2003.

"There is absolutely no allegation that any director of the company or the club itself have benefited financially from any of this activity. In so far as there may be any implications for the company, these are not considered material to its financial affairs and they are in relation to the payment, or possible non payment of PAYE and National Insurance contributions.

"The club and its directors are co-operating fully with the police in this investigation and will continue to do so. For the avoidance of doubt we wish to make it plain that David, Karren and Birmingham City FC deny absolutely any wrong doing."

Privately the pair are said to be angry that they are becoming embroiled in the investigation, especially being associated with such a pejorative phrase as 'corruption in football'. Brady, 39, is a highly respected businesswomen, a pioneer in a male-orientated game. Sullivan, 59, while less respected having made his fortune through selling pornography and the Sport newspapers, is very successful.

Mr Sullivan said: "I'm shocked by the whole thing. The police statement was very unfair. It is to do with two foreign players and the PAYE on those players. This is a complicated tax matter." He added: "We answered every single question they put to us. We have absolutely nothing to hide. We have done nothing wrong, and we think in due course this will be proven."

Police interest is reported to revolve around the signing of Aliou Cissé, a Senegalese international bought from Montpellier, and another African player. Both played in the 2002/03 season, Birmingham's first in the top flight since 1986.

The club had said on Wednesday the arrests were to meet a "long-standing appointment" with the police, and were "willingly attended". However, Sullivan is not thought to have expected to have his home searched.

The arrests were the latest development in an inquiry which has been under way for 20 months. Four clubs, two players, two chairmen, two chief executives, a manager and an agent have all been drawn into the investigation. Most of the individuals are on police bail, none have been charged.

The first arrest came in May when an unidentified 61-year-old man from Manchester was questioned on suspicion of money laundering. In July, detectives raided Newcastle United, Rangers and Portsmouth. In September, Pascal Chimbonda, the Tottenham defender, was questioned on suspicion of fraud. This was thought to relate to his transfer from Bastia to Wigan in 2005.

In November came the most high-profile arrests as Harry Redknapp, Peter Storrie and Milan Mandaric, respectively Portsmouth manager, chief executive and former owner (now owner of Leicester City) were questioned.

Amady Faye, the Charlton midfielder on loan to Rangers, who previously played for Portsmouth, and Willie McKay, agent to Chimbonda and Faye, were also arrested. All the men, who were arrested "on suspicion of conspiracy to defraud and false accounting", strongly deny any wrong-doing.

Last month the investigation widened as Birmingham's offices were raided. Now Brady and Sullivan had been added to the list.

The latter arrests are another chapter in a season of turmoil at St Andrew's. Newly returned to the Premier League, the campaign began with Sullivan and the Gold brothers, David and Ralph, preparing to sell to Hong Kong businessman Carson Yeung. All three sold large tranches of shares in July. The sale collapsed, but not before manager Steve Bruce, unsure about his future, had been lured to Wigan Athletic. Coincidentally, or not, trading was suspended yesterday on shares in Yeung's Hong Kong-listed company, Grand Top International. Yeung had owned 29.9 per cent of shares in Birmingham City and is thought to retain a significant stake.

The one probability about Operation Apprentice is that it will not be concluded any time soon as the City of London Police will want to be very sure of their case before bringing a trial.

The same unit, the 158-officer strong Economic Crime Department, oversaw the £10million three-year investigation into corruption in horse racing which accused multiple champion jockey Kieren Fallon of race-fixing. The case ended in ignominy in December when the Old Bailey judge threw out the case prompting an internal review of the investigation.