Manchester City are being investigated by Uefa over how their parent company, City Football Group, and their subsidiaries may be sharing the club’s sizeable losses.

Last season City were fined £16m and set a £49m net transfer spend restriction, along with having their Champions League squad reduced to 21, for failing to comply with Uefa’s financial fair play rules.

Now, after City announced a £23m loss for 2013-14, a reduction of around half over the previous year, Uefa is examining the CFG structure. One aim is to discover whether some of the subsidiary companies may be soaking up losses made when executing business for City.

A City spokesperson told the Mail on Sunday: “The examination of the club’s structure and subsidiary companies is a scheduled and routine part of the Uefa monitoring process.”

The champions were embarrassed over misinformation regarding the Frank Lampard deal – last week it emerged he never signed for New York City FC and so was not on loan at the champions as they claimed but there on a permanent transfer – and the club will not want further questionable publicity.