Birmingham City owner Carson Yeung appeared in court in Hong Kong today on five charges of money laundering.
He was released on £550,000 bail and ordered to surrender his passport with the trial adjourned until August. The charges carry a maximum penalty of 14 years in jail and a fine of £400,000.
Yeung, 51, was arrested at home in Hong Kong's Peak District yesterday after officers searched two locations and seized documents.
Prosecutors said a two-year investigation using forensic accounting had identified "hallmarks of money laundering" for the flow of money in five bank accounts held by Yeung and his father between 2001 and 2007.
The Football League said it was closely watching proceedings for any potential impact on Birmingham City.
It is alleged that Yeung and his father dealt with a total of £57 million that "in whole or in part directly or indirectly represented the proceeds of any indictable offence". The court was told that the two men declared less than £160,000 in taxable income in the six years.
Yeung, who took control of Birmingham in 2009, appeared in court after a night in jail looking sombre in a dark business suit. He did not enter a plea.
His lawyer, Daniel Marash, argued against prison custody and said his client was required to deal with the financial business of the football club. Yeung's knowledge of football meant he was consulted on a daily basis about the sale of players, Mr Marash said.
He argued that the prosecution case was weak as it did not explain why the sums were linked to indictable offences. "He has two bank accounts with a lot of money in them but all they're saying is that he has got a lot of money and hasn't paid a lot of tax," Mr Marash said. "You cannot assume it's taxable."
Little is known about Yeung prior to his purchase of Birmingham City. According to reports, he trained as a hairdresser in the Nineties before making a £190million fortune through investments in penny stocks and his ownership of a casino on the gambling island of Macau. He became the club's largest shareholder after he bought a 29.9 per cent share for £81million from David Sullivan and David Gold, now co-owners of West Ham.
Birmingham City's acting chairman issued a statement saying he did not believe the police investigation involved Birmingham International Holdings, the Hong Kong-listed company that owns Yeung's stake in the club.
Birmingham were relegated from the Premier League on the final day of the season.
