Leeds order inquiry into Hauge fee

Leeds United yesterday began an internal audit of their finances and transfer dealings in the light of allegations about the handling of the £18.5m acquisition of Rio Ferdinand from West Ham.

The inquiry is understood to focus on alleged payments to the disgraced Norwegian agent Rune Hauge in November 2000 and whether they were authorised by the chairman Peter Ridsdale or former manager David O'Leary.

The inquiry is understood to have been initiated by the Leeds United plc deputy chairman Allan Leighton, with Ridsdale's backing, in an effort to restore the club's credibility.

Fans are still reeling from the controversial sale of several star players, and shareholders have been angered by what they see as financial mismanagement. "The transfer allegations are just the latest in a catalogue of disasters and there are so many questions that still need to be answered," said one of Leeds's major investors last night.

Club sources have suggested that a payment of about £1.5m was made to Hauge for his involvement in three transfer deals, including Ferdinand's, but all were above board. It is thought Leeds are ready to exonerate Ridsdale. Many at the club believe he has been the victim of a smear campaign.

Others speculate that the pressure on Ridsdale, who has been the target of fan demonstrations, could force him to step aside. The club are expected to appoint a new chief executive within three weeks in a move that would reduce Ridsdale's day-to-day control. Yet some believe he may still quit if he believes it is in Leeds's best interests.

The board is expected to meet before the end of the month to discuss changes to the way the club is run and then present a plan to the City in March. The recent priority has been to reduce huge debts accrued as Leeds built a squad with a wage bill that relied on competing in the Champions League. However, the sale of players including Ferdinand, Robbie Fowler and Jonathan Woodgate has infuriated fans.

Redundancies are now expected among the non-playing staff. A further non-executive director is likely to be appointed, after two recent recruits in Microsoft UK's managing director Neil Holloway and Prof John McKenzie.

Bosko Balaban, meanwhile, who joined Aston Villa for £6m 18 months ago in a move which is now part of a Football Association investigation involving many of the deals carried out by the former manager John Gregory, wants to return from a loan spell at Dinamo Zagreb.

Balaban, who never started a league game for Villa, has scored 12 goals and, with three years to run on his contract, wants a second chance. "I am getting regular football and my form has improved," he said. "I shall return in the summer and see what Villa have to say. The final word will be theirs but I would like to go back and play."