The former chief executive of Wrexham football club, Paul Retout, is under investigation in relation to a business in London, it has been confirmed.
The Crown Prosecution Service in London said it is considering a file relating to financial irregularity claims.
However, no decision has been taken as to whether charges will be made.
Mr Retout told the Wrexham Leader he could confirm he had been involved in a legal dispute and that no charges had been brought against him.
A spokewoman for the Crown Prosecution Service in London said: "I can confirm that CPS, London, has received a file on Paul Retout in relation to alleged financial irregularities.
"I can also confirm that we have advised the police to undertake further enquiries and that no decision has yet been made on whether or not to prosecute."
A Metropolitan Police spokesman added: " I can confirm officers from Southwark CID are investigating an allegation of fraud.The allegation was reported to police in September 2009.
"A man in his 40s has been arrested in connection with the allegation and has been bailed to return on a date in August to a south London police station pending further enquiries."
Police confirmed that the allegations related to a company based in London, and that a file was submitted to the CPS to consider in March.
Mr Retout has been unavailable for comment and has not responded to a request from BBC Wales.
But in a statement published in the Wrexham Leader newspaper, he said: "I can confirm that I am involved in an acrimonious legal dispute with a business I was previously a partner in.
"I can also confirm that no charges have been brought against me, and my lawyers will vigorously pursue any instance of slander, libel or defamation of character if deemed necessary."
Mr Retout announced last month that he was taking a six month sabbatical from his role at Wrexham FC and also the Crusaders rugby league side.
He said that after two years of non stop work at the Racecourse, he wanted time to "recharge my batteries and to deal with some personal issues."
He said he was planning a trip to Australia to find out how rugby league was organised there.
He said he intended to return to the Racecourse after his break.