Football’s autumn crisis club, Northampton Town, take their unpaid players on Saturday to play their former tenant, Coventry City, in an FA Cup first-round tie at which buckets will be rattled and a familiar cry heard: Save the Cobblers. Northampton face a winding-up petition from Her Majesty’s Revenue and Customs for a reported £160,000 unpaid tax and the club’s hardworking staff have not been paid their October wages – the Professional Footballers’ Association is stepping in to pay its own members.

That cash-flow squeeze, however, which is expected to be salvaged by Kelvin Thomas, the former Oxford United chairman taking over the club next week from David Cardoza, is the least of the scandal which has enveloped the club. Put bluntly, there is a huge, grim question over where £10.25m has gone, which was lent to the club by Northampton borough council between September 2013 and August 2014, specifically to pay for improvements to its Sixfields stadium, including a new East Stand.

All that exists in return for so much money are minor works on the west stand, floodlights understood to have cost a little over £100,000, and a shell of a new East Stand for which the developer, Buckingham Group, says it was paid only £442,000, before it downed tools. The developer, whose previous projects include Brighton & Hove Albion’s high quality Amex Stadium, was also commissioned to build a new stand at Northampton Saints rugby club, again with a loan from the council; that stand is complete and opening on Saturday.

The council leader, Mary Markham, told the Guardian: “We do not know where the money is, and this is not acceptable. We ourselves have asked David Cardoza where the money has gone, and in legal letters, but answers have not been forthcoming.” Markham said the council was passing all its information to Northamptonshire police, which said it has officers looking into it, but has not formally launched an investigation.

David Cardoza and Howard Grossman, a north London property developer whose company, 1st Land Ltd, was contracted to manage the East Stand development, told the Guardian they could not comment or answer a series of questions because of confidentiality they have agreed in a legal settlement, apparently after litigation between themselves.

The Guardian has seen two invoices from an architect, Stuart Loxton, to 1st Land Ltd, for £18,500 in total, headed “Northampton Town Football Club: Design concept plans”, which Loxton says were in fact drawings for the design of David Cardoza’s new family home in Church Brampton, a village near Northampton. Loxton told the Guardian he was also having dealings with Grossman at the time, and was asked by another director of a Grossman company to put Northampton Town as the heading on those invoices for Cardoza’s house.

David Cardoza is understood to deny any knowledge of the invoices. Grossman, citing the confidentiality agreement, declined to respond to any questions, including about Loxton’s invoices.

This scandal has baffled and distressed Cobblers supporters, because David Cardoza has been generally respected since he rescued the club from a previous financial crisis in 2003, and has sustained the club with £5.2m in loans during the 12 years since. Yet now one of his companies has gone bust, the land behind the East Stand he and his father, Tony, owned has effectively been repossessed by the council, the club has run out of money and he is expected to hand it over to Thomas for £1.

David Cardoza contracted the East Stand project to Grossman, whose entry at Companies House shows he is a director of six companies and was a director of 24 which are now dissolved. A large proportion of the £10.25m loaned by the council was apparently paid by the club to 1st Land Ltd, a company of which Grossman was the sole director and shareholder, to enable the works to be done.

In forthright statements Buckingham made to the Northampton Town Supporters Trust and on its own website, the developer said the club scaled down the original £8m specifications for a quality new East Stand to “a bog standard” structure which would have cost only £4m. Despite that, Buckingham says it was paid only £442,000, and had to pursue Grossman for £1.9m then owing. When this was not forthcoming, Buckingham put 1st Land into administration. The administrator, Mazars of Birmingham, found no cash in 1st Land’s bank account.

Grossman himself said of 1st Land’s affairs in February that he had been in a dispute with David and Tony Cardoza, and that 1st Land had actually paid £2.2m back to the football club. Grossman stated that a further £2.65m of 1st Land money was paid to the Cardozas personally, who, he said, argued it was not a loan to them but a “joint venture fee”. A further £1.5m was paid out of 1st Land to another of Grossman’s companies, County Homes (Herts) Limited, registered like all his companies at 156-158 Bushey High Street. Grossman stated this was for 1st Land using “premises and infrastructure” provided by this other company.

More than £233,000 was paid to another company: County Cemetery Services, which never traded but was intending to erect “memorial walls”. It was registered at the same Bushey address, and two other directors in Grossman’s County group of companies, his son Marcus and Simon Patnick, were directors. David Cardoza was himself a director until August 2014, when his dispute with Grossman is understood to have started, and Cardoza’s wife, Christina, was a shareholder. County Cemetery Services has also now been put into administration, with only £5,000 in the bank, its only assets some contracts, designs, a patent application and a Mercedes. The administrator, Begbies Traynor, noted £260,000 owing to 1st Land Ltd, and £22,500 to County Homes (Herts) Ltd.

With the unfinished work glowering at worried Cobblers fans this year, David and Tony Cardoza promised to get Buckingham paid and continue the works, via their company, County Developments (Northampton) Ltd. Buckingham said David Cardoza made “repeated assurances” that there was adequate money from the council loans to complete the stand; but stopped work after a month having, they stated, “not been paid a penny”. Buckingham has now put that Cardoza company into liquidation. In its own statement two weeks ago, Buckingham said: “This regrettable situation has arisen through what we can only conclude is the gross mismanagement and/or the misappropriation of a very significant public loan by those in receipt of that loan.”

Both David Cardoza and Grossman said they do have full explanations for the conduct of the stadium project but are unable to give them at the moment because of confidentiality agreed in their legal settlement. The Cardozas and Grossman are all understood to deny any wrongdoing.

This crisis has deeper significance because the Northampton Town supporters’ trust, formed during a previous crisis in 1992, was the blueprint for the national movement to form mutual trusts, and its founder, Brian Lomax, died this week. The trust maintained an elected director on the board for more than 20 years until two months ago when the latest director, Andy Clarke, resigned over the current debacle. The trust hopes it can revive its partnership with Thomas if he does take over.

In a statement, the trust said there was a “drastic need” for David Cardoza and Grossman to answer questions about the £10.25m. Describing Lomax as “our dear friend, who spearheaded the supporters’ movement”, the trust stated: “We know that Brian would be very proud to see Cobblers fans unite to try and rescue their club once again.”

And with that, they take their buckets to the Ricoh Arena. Meanwhile, Northampton borough council continues to seek answers about what happened to £10.25m of public money intended to improve a football ground.