Police in Hong Kong have made an arrest in connection with the accused theft of £2.5 million for the clubs funds.
The 33-year-old man has been released pending further investigation and is suspected to be a former employee of The Blues.
The Birmingham International Group, who own the midlands based team told the BBC on Monday that the loss “may have a material impact on the operation and financial situation of the group".
The shares have been frozen and suspended for six weeks whilst the investigation is being conducted but will not return to trading until further notice.
Former Birmingham City owner Carson Yeung, was acting as a shadow director and had had "ongoing dialogue with the club in recent months” according to a Football League spokesman.
Yeung was convicted of money laundering in his native country of Hong Kong last march and was jailed for six years but is currently going through the appeal process.
He resigned as director and chairman of Birmingham International Holdings, President of Birmingham City and director of Birmingham City plc.
He had also requested this week to replace three of the directors at Birmingham with three others that he would nominate. Birmingham have ask that the Hong Kong stock exchange investigate the request.
Birmingham City fans have raised their concerns to the Football League and have asked that they be investigated.
Source: DSG
