Watford are in serious trouble over allegations of forging a bank letter addressed to the Football League.
The Daily Telegraph has claimed that the Hornets forged a letter from the international bank HSBC prior to the purchase of the club by Italian owner Gino Pozzo in 2014.
The letter served as a guarantee from the bank that Pozzo had enough funds available to bankroll the club.
The Telegraph has reportedly obtained a copy of the letter and has passed it on to the bank and the police. The EFL has also been alerted about the wrongdoing.
An EFL spokesman said: “We can confirm, following receipt of information from The Daily Telegraph, that we immediately commenced a disciplinary investigation into serious allegations made against Watford Football Club.
“The club has been formally contacted by the EFL and is now required to provide a full and detailed response to the allegations. Once that response is received, it will be fully considered by the EFL and appropriate action will be taken under our rules and regulations.”
According to the EFL rules, if Watford are proven guilty then their punishment could range from warnings to expulsions from the competitions. The Hornets could also face possible financial fines and point deductions.
An internal enquiry has reportedly been set up and an independent legal firm has been hired to look into the authenticity of the documents. The Premier League club has until next week to respond to the EFL.
A club spokesman said: “There are two ongoing investigations. It would be inappropriate to comment further until those investigations reach completion.”
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