Wembley chiefs have confirmed they are now looking at the allegations, contained in the latest tranche of Football Leaks documents published by German magazine Der Spiegel.
According to Der Spiegel, City agreed to pay then-club Watford £150,000 for Sancho – with another £500,000 due if he made 10 first team appearances – when his switch was agreed in 2015.
But it was then reported Sancho’s agent, Emeka Obasi, was handed “what appeared to be a scouting contract” worth £200,000.
Spiegel say the money was described as an “agent fee” in internal City documents, despite being nominally for “scouting services”.
The German magazine also claims to have a copy of a letter sent by City Sancho’s father in March 2015, laying out his salary, signing bonus and other financial numbers.
According to the documents, a club lawyer intervened to “make it clear this was not an offer” but admitting “there is a risk that this would still be deemed to be an inducement and therefore a breach” of rules outlawing payments to minors.
Now the FA have decided to intervene. In a brief statement, the FA said: “We can confirm that we will be investigating the allegations.”
City, who are understood to be determined to contest any suggestions of wrongdoing, already face the threat of a potential Champions League ban over alleged breaches of Uefa’s Financial Fair Play regulations.
The Etihad club were boosted last week, though, when the Court of Arbitration for Sport’s ruling in favour of Turkish side Galatasaray effectively closed the door to Uefa re-opening the 2014 FFP case against them which was closed after a “settlement” agreement was reached.
City declined to add to their previous statement about Football Leaks claims, only re-iterating: “We will not be providing any comment on out of context materials purported to have been hacked or stolen from City Football Group and Manchester City personnel and associated people.
“The attempt to damage the club’s reputation is organised and clear.”
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