Watford have launched an investigation following allegations that they supplied false financial documents to the English Football League.

The allegations, reported in the Daily Telegraph yesterday, centre on Gino Pozzo’s sole takeover of the Hornets in 2014, where he assumed complete control from his father Giampaolo, and the alleged use of a forged banking letter.

Watford are now under investigation from the EFL and could face a hefty fine or points deduction.

Chief executive Scott Duxbury said in a statement: “The club had no prior knowledge of any concerns about the authenticity of the document.

“The club takes this matter extremely seriously and has instructed independent solicitors to carry out an investigation into relevant matters and provide the EFL with the solicitor’s report early next month.”

He added: “The EFL has indicated it is happy with this course of action.

“In light of the ongoing investigation, it would be inappropriate to comment further at this time.”

As Watford were a Championship club at the time, the EFL will carry out the investigation, which concerns a proof of funds document provided to the EFL in order to ratify a change in shareholder.

An EFL spokesman said: “We can confirm, following receipt of information from the Daily Telegraph, that we commenced a disciplinary investigation into serious allegations made against Watford FC.

“The club has been formally contacted by the EFL and is 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 our rules and regulations.

“We will not be making any further comment until we are in receipt of the club’s response.”

Walter Mazzari’s side are currently ninth in the Premier League after taking 12 points from their opening nine games.