Man City signed Benjani from Portsmouth in January 2008
Portsmouth have been fined £15,000 after they were found to have breached rules connected to the signing and selling of Zimbabwe striker Benjani.
Agent Willie McKay has also been handed a suspended ban by an independent regulatory commission for his part in brokering the deals.
Benjani joined Pompey from Auxerre in 2006, before moving to Manchester City.
McKay represented the selling club in both cases, which is against Football Association rules.
The FA stipulates that agents cannot act for two different clubs in two consecutive transactions involving the same player.
Portsmouth issued a statement saying the club was "astounded" by the findings.
Both parties were fully aware of the new regulations at the time the offences were committed
Paul Gilroy QC
"We had no idea that Willie McKay received a fee when Benjani joined us from Auxerre," the club said.
"Both the agent and the club confirmed this to the FA - evidence they have clearly ignored."
McKay was found to have acted for both Auxerre, when Benjani joined Portsmouth for a then club record fee of £4.1m, and also for Portsmouth when the player completed his switch to Man City in January 2008.
Any further breaches of the FA's agent regulations will see the Monaco-based Scot suspended from all deals involving English clubs during one transfer window.
Pompey will receive a further £15,000 fine if they breach any rules during the next two years.
"The Football Agents Regulations were introduced as an important method of addressing unacceptable practices in professional football, particularly in the transfer market," said Commission chairman Paul Gilroy QC after Monday's hearing.
"Both parties were fully aware of the new regulations at the time the offences were committed.
"The commission considered that the justice of the case was met by imposing penalties which to a large degree will act as an incentive to both parties to avoid any future transgressions."
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