By Meirion Jones
Senior Producer, BBC Newsnight
Fifa has launched a probe into whether Arsenal have broken regulations which may leave the club exposed to possible expulsion from the Champions League.
BBC Newsnight has learnt that a police probe in Belgium has concluded Arsenal made secret payments of £1m to Beveren.
Arsenal have admitted providing a loan to Beveren, but say they have never had a controlling influence over the club.
Fifa is investigating whether Arsenal have breached rules governing fair play and conflict of interest.
It was a mystery payment of £1m to an obscure Belgian football club in 2001 which sparked off a money-laundering investigation.
The club, Beveren, was in desperate financial straits and they refused to say where the cash had come from.
Fog of secrecy
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 threw out most of its Belgian players and replaced them with unknowns from an academy in Ivory Coast, West Africa. Belgian police suspected the fog of secrecy was hiding mafia involvement.
Instead after an investigation they have told Newsnight that they found Arsenal's secret hand behind the money.
Arsenal has a public deal with Beveren to play friendly matches and loan players but Arsenal repeatedly denied that they put money into the club.
Arsenal now admit that they did loan money, indirectly, to Beveren.
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."
Reading from his investigation, Mr Du Four said: "Jean Marc Guillou, 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 then highlighted one contract signed by Arsenal Vice-Chairman David Dein. The contract (Document B) 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 to establish a company called Goal which would take over control of Beveren football club.
The loan and other money advanced by Arsenal would be repaid out of Goal's share of transfer profits. Du Four says that in all Arsenal put in £1m.
Arsenal signed Emmanuel Eboue from Beveren for a reported £1.5m
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%.
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 secretly controlled another club, especially one such as Beveren, from who they bought Emmanuel Eboue, they could be in breach of Fifa rules and could be heavily fined or even thrown out of the Champions League.