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Fifa has begun an investigation into whether Arsenal have broken regulations which could see the club thrown out of next season’s Champions League.

According to a report on BBC’s Newsnight programme police in Belgium have concluded Arsenal made secret payments of £1m to Beveren.

Arsenal have admitted providing a loan to Beveren, but say they have never had any influence over the club.

Fifa is investigating whether Arsenal have broken rules governing fair play and conflict of interest.

It was a payment of £1m to an Beveren in 2001 which prompted the money-laundering investigation.

Christian du Four, the Investigating Magistrate in the Flemish town of Dendermonde, told Newsnight: “A company with no name wanted to invest a million pounds in the club. We thought it rather bizarre.”

At the same time the team got rid of most of its Belgian players and replaced them with players from an academy in Ivory Coast, West Africa. Belgian police initially suspected the fog of secrecy was being employed to cover up a money laundering operation at the club.

Instead they found Arsenal were behind the money, despite the Premiership club always denying having a financial stake in the club.

An Arsenal spokesman said: “Arsenal confirms that it has never owned, directly or indirectly, any shares in Beveren or had any power whatsoever to influence its management or administration. It did in 2001 provide funds of 1,570,703 euros by way of loan to a member of the consortium to assist in stabilising the finances of Beveren.”

“At no time has anyone at Arsenal been contacted by any regulatory or investigatory body with respect to its relationship with Beveren. Arsenal and all its staff have acted properly throughout, in accordance with all applicable rules and regulations, and in the best interests of Beveren, Arsenal and the broader footballing community.”

Reading from his investigation, Mr Du Four said: “Jean Marc Guillou (who worked as an assistant to Arsene Wenger at Cannes), who is the manager of Beveren, has very close contacts with Arsene Wenger, the coach of Arsenal, and that is why they went ahead with the contract.”

He also produced a contract signed by Arsenal vice-chairman David Dein. The contract shows Dein agreeing to advance 12m Belgian francs (around £200,000) on behalf of Arsenal Football Club in an interest free loan to an associate of his called Raoul de Waele.

The loan was used to establish a company called Goal which would effectively run the Belgian club.

The loan and other money would be repaid out of Goal’s share of transfer profits. Du Four says thatArsenal put in £1m in total.

“Goal will hold a majority of the share capital [of the second company, which would be] formed for the purpose of acquiring the assets, liabilities, contracts and undertaking of VZW KSK Beveren,” the agreement stated.

A director of Beveren, who did not wish to be identified, told Newsnight that in return for the £1m, De Waele was given 50% control of Beveren and Guillou was given another 30%.

Arsenal have certainly benefited from their relationship with Beveren. They bought Emmanuel Eboue from the Belgian club in 2005 for an undisclosed fee.

Fifa President Sepp Blatter told BBC Radio Five Live: “Let Arsenal give the Football Association their report. It will be then be reported later to Fifa but for the time being I am not in a position to make any comments about what punishments or sanctions should be taken against a club.”

If Arsenal did secretly controll another club, especially one from who they bought Emmanuel Eboue, they could be in breach of Fifa rules and could even thrown out of the Champions League.

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