Watford are under investigation for allegedly supplying false financial information to the Football League.

The Telegraph claims the Hornets submitted a forged bank letter to the Football League, now known as the EFL, when Gino Pozzo became the sole owner prior to the 2014-15 campaign. 

The fabricated HSBC document states Hornets Investment Limited, the holding company which owns the club, had sufficient financial resources with the bank for it to issue a cash-backed unsecured bank guarantee up to £7m during the 2014-15 season. This enabled Pozzo to take full control of the club.

The letter was secured by Watford’s executive chairman, Raffaele Riva, who is also a leading executive of Hornets Investment. 

Riva asked a third party to obtain a letter from the bank and has insisted he had no reason to doubt the authenticity of it. 

Watford, who are conducting an internal inquiry, could face a fine or a points penalty if they are found guilty of the allegations. 

A club spokesman said there are two ongoing investigations and added it would be inappropriate to comment further until those investigations are completed. 

READ MORE: Watford holding investigation into allegations of providing false bank letter to Football League.

There is no suggestion in the report that Pozzo had any knowledge of a forged bank letter being obtained or used on his behalf. 

An EFL spokesman confirmed following receipt of information from The Daily Telegraph, a disciplinary investigation has been launched into serious allegations made against Watford.

The club has been formally contacted by the EFL and are now required to provide a full and detailed response to the allegations.

Once that response is received, it will be fully considered by the EFL and appropriate action will be taken under their rules and regulations.