McManaman is a director of Yeung's company Grandtop International and is said to act as an advisor on football matters.
On McManaman's recommendation, a list of players was sent to the Blues board by Yeung for the club to look at.
And Real Madrid midfielder Esteban Granero was lined up for a move, but manager Steve Bruce was concentrating on his own targets and vetoed the loan.
Yeung insisted McManaman's involvement, and that of another ex-Madrid ace, former French World Cup winner Christian Karembeu, was essentially to bring prestige in the Far East, as well as expert know-how to Grandtop.
McManaman would not be considered for a director of football role at St Andrew's, nor any coaching position, Yeung said.
Sullivan told the Birmingham Mail: "What is his role? I don't know, none of us do.
"He is a friend of Mr Yeung's and a director of his company.
"We received a list of players to look at before the transfer window shut and they were all Spanish, mainly from reserve teams.
"The lad Oubina was on it, but we had already identified him, they had nothing to do with it."