Coventry City Council has denied any wrongdoing in its use of European Development Fund cash - blaming "confusion" over a Freedom of Information Act request.
MEP Nikki Sinclaire has referred the authority to OLAF, the European Unions anti-fraud department, claiming there are "discrepancies" in what the council has used £4.75million of EU cash for.
But a spokesman for the council today said there had been a mix-up between two similar grants awarded by two different bodies.
He apologised for the incorrect information given at first - and said the authority was "surprised" by Ms Sinclaire's announcement.
There are two separate figures – a grant of £4.75million given to the Council in 2003 by Advantage West Midlands. This was used to fund the purchase of the Arena site. From 2006 onwards the Council received a series of European Regional Development Fund payments that finally amounted to £4.6million. These related to site acquisition and building costs on the overall site, but not for the Arena itself.
Both of these sums relate to the overall Arena project, which of course also included the delivery of the highly successful Arena Shopping Park.
The project has created hundreds of jobs for local people and provided a much needed boost to the local economy.
All of the transactions referred to by Ms Sinclaire have, of course, been subject to audit, both by the council’s auditors and by auditors for the European Commission, and received a clean bill of health.
We’re sorry we gave the wrong information initially - we mistakenly provided Ms Sinclaire with the AWM grant funding amount rather than the ERDF funding - in our original response to the FOI.
However, when Ms Sinclaire queried this information we did fully clarify the information and figures with her.
We’re therefore surprised that Ms Sinclaire has chosen to make such an issue of this as we’ve always been transparent and open about the funding used to redevelop the site.
West Midland MEP Nikki Sinclaire announced she would be referring Coventry City Council to the EU's anti-fraud department during a speech at the European Parliament in Strasbourg.
She claims there are "discrepancies" in the way the council used Regional Development Fund cash, compared to what the European Commission believed it would be used for.
Coventry City Council is facing a fraud investigation after Midland MEP Nikki Sinclaire announced she was reporting the authority to the EU anti-fraud unit.
Speaking in Strasbourg, Ms Sinclaire accused the council of "discrepancies in funding" over £4.75million of cash awarded towards the running of the Ricoh Arena.
She said she had submitted a Freedom of Information request to the council to establish what the money was to be used for.
But, she added, the answer "could not be further apart" from the answer the European Commission gave.
Today I can confirm that I am referring the matter to the EU anti-Fraud department, OLAF for investigation into this use of taxpayers’ money
There is something rotten at the heart of Coventry Council. Is there something fraudulent as well?
The council today denied any wrongdoing.
The FootballCV Academy will play eight competitive matches at the Ricoh Arena in Coventry during the 2014/15 season.
Students at the academy will have the opportunity to play at the stadium.
Coventry City fans expressed anger last night with a mid-match protest.
They held up signs saying "Why?" and "When?" to question why the club left the Ricoh Arena to play at Northampton Town's Sixfields Stadium and when the Sky Blues will return to Coventry.
The protests took place in the 35th and 61st minutes of the FA Cup game against Arsenal. The 35th minute was chosen because it represents the distance in miles between Coventry and Sixfields, where the Sky Blues currently play their home matches.
The second protest was staged after half-time, 61 minutes in, reflecting Jimmy Hill's takeover of the club in 1961, which marked a major period of transformation for the club.
Coventry lost 4-0 to Arsenal.
Sports pitch experts are gathering in Coventry today, to prepare for the 2015 Rugby World Cup in England.
They will be sharing tips at a conference at the Ricoh Arena. Villa Park in Birmingham is among the host venues for the tournament in two years time.
The Ricoh Arena is no longer suing Northampton Town for ground-sharing with Coventry City.
In July, stadium bosses announced they were planning legal action against The Cobblers for effectively 'stealing' their customer.
The Sky Blues currently play at the Sixfields Stadium in Northampton and have signed a deal to stay there for at least three years.
This evening the Ricoh has confirmed it has dropped the claim 'so as to avoid any further distress to [Northampton] fans and to help clarify the position for long suffering Sky Blues supporters.'
"We still believe our action against Northampton Town Football Club has strong legal merit.
"In light however of the Football League's decision to award the Golden Share to Otium Entertainment and the recent public statement made by Joy Seppala... it has become clear that even successful legal action will not bring the Club home from Northampton.
"We await Otium's best offer to return but to date we have heard nothing from them.
"Our focus remains on running our successful business."
Companies House have warned Sky Blues bosses that they may face criminal prosecutions for not filing their accounts at Companies House.Read the full story ›
Just 1,100 fans travelled to Northampton's Sixfields stadium for the Sky Blues' first 'home' game at their new base.
There were protests outside by angry fans demanding the team be kept in their home city.
Meanwhile, around six times that many headed to the Ricoh Arena for a legends match in celebration of the club's 130th anniversary.
Andy Bevan reports.
Fans at a charity legends match at the Ricoh Arena have sung official Sky Blues song Let's All Sing Together to the sound of a brass band.
The match is being held to herald Coventry City's 130th anniversary.