The Independent Football Regulator (IFR) will have “absolute power” to force Manchester City’s owners to sell if they are ultimately found to have run the club improperly, the watchdog’s chair has said.

Manchester City have been found guilty of circumventing Premier League rules by an independent commission, which found they set up “sham” commercial arrangements to inflate revenues or reduce costs by over £900m over a nine-season period.

They were also found to have made “concerted efforts” to “stop and frustrate” the Premier League’s investigation into those arrangements. City have lodged an appeal, claiming the verdict “contains clear material errors, of law, principle and fact, and is unsafe”.

David Kogan, the chair of the IFR, told podcast The Rest Is Football it was premature to talk about any action his organisation might take while the appeal was ongoing. Kogan did confirm, though, that the IFR had “absolute power” to force a sale by the club’s ownership, if that was felt to be appropriate.

“We have the power to ask an owner to step away from a club if we believe that they run a club in a way that is neither fit, fair or done with propriety,” Kogan said. Asked if an owner could refuse to divest, Kogan replied: “No, no, no. We’ve got absolute power to do so.”

On the possibility of the IFR investigating City, Kogan said: “I am not going to get pushed into making any judgement on this until we’ve seen all of those questions being answered. Then we will have to decide whether we’re going to mount our own investigation and come to a conclusion on that and what we’re going to do. And pre-empting that would be a colossal mistake.”

Manchester City are majority-owned by Abu Dhabi United Group (Adug), an investment vehicle owned by Sheikh Mansour bin Zayed Al Nahyan, a member of the Abu Dhabi royal family.

Kogan has already pledged to resign if there is any political interference in any investigation the IFR may undertake into City, amid concerns it could create a diplomatic issue between the United Kingdom and the United Arab Emirates.