(CNN) -- Manchester City could become the second English club to receive a transfer ban after being reported to football's world governing body FIFA by French side Stade Rennes over an alleged illegal approach for a youth player.
Manchester City released a statement insisting the club had acted within the rules in signing Jeremy Helan.
FIFA confirmed on Tuesday that it would be investigating City's acquisition of 17-year-old defender Jeremy Helan in February.
"We can confirm that there is a case pending with FIFA's Player Status Department involving Jeremy Helan, Stade Rennes FC and Manchester City," it said in a statement.
Rennes technical director Pierre Dreossi told UK newspaper The Independent that City's move for former France youth captain Helan was "even more illegal" than Chelsea's signing of Gael Kakuta, which saw the London side banned by FIFA from registering any new players until 2011.
Dreossi said that Helan, then 16, was targeted last year by Manchester United until City's local rivals gave up when Rennes refused to supply an International Transfer Certificate (ITC).
City moved quickly after receiving an ITC, which Dreossi insisted was provided by the French football federation by mistake.
"We have referred this to FIFA," Dreossi told The Independent. "For us it was strange to have no discussion from City and now, in the week after the FIFA declaration on Chelsea, I would hope that it will be the same thing for Manchester City.
"Kakuta signed up for just a possibility of a full contract. For Helan there was definitely one there, under the terms of the pre-contract agreement, because he had played for his country.
"Manchester United said it was not possible to negotiate with us but for City now this is dangerous, though we are not expecting a decision from FIFA for perhaps several years.
"Manchester City must now realize the consequences of their attitude in the Helan case as it is even more illegal than Kakuta."
The Independent reported that the case was further complicated by the fact that Helan and Rennes are in dispute about what he agreed to in the pre-contract deal he signed as a 13-year-old. Players under the age of 18 cannot sign professional contracts.
City released a statement on Tuesday insisting that the Premier League club "acted within the rules throughout the process and in no way induced any breach of contract by Jeremy Helan."
"Manchester City is aware of the ongoing contractual dispute in the French Labor Courts between Jeremy Helan and Stade Rennes," said a statement on the club's official Web site.
"The dispute between the player and the club pre-dates any interest from Manchester City. Manchester City obviously cannot comment on the case until the French Judicial Process has run its course."
While Chelsea are determined to appeal their punishment, United may also face an inquiry after French club Le Havre refused an ITC for 16-year-old midfielder Paul Pogba, who moved to Old Trafford in May.
United have threatened Le Havre with legal action if president Pierre Louvel continues with claims that the English champions offered inducements to Pogba's parents.
Meanwhile, Manchester City will be missing summer signing Carlos Tevez for Saturday's Premier League clash with Arsenal.
The striker suffered a knee injury during Argentina's 3-1 defeat by Brazil on Saturday, but manager Mark Hughes hopes he will be fit to face Manchester United the following weekend.
City's Brazil forward Robinho is also in doubt for the Arsenal game after picking up a knock in the World Cup qualifier.