Championship outfit Birmingham City face a 12-point reduction this season.

The Telegraph reports it relates to the summer signing of Danish left-back Kristian Pedersen, who arrived at St Andrew's for £2million despite the club being under what has been termed a 'soft' transfer embargo.

Now Garry Monk's men - who spent heavily under Harry Redknapp 12 months ago in a failed attempt to put together a promotion bid last season - are facing a heavy fine and a potential deduction.

The EFL admitted in a statement that they were “exceptionally disappointed" with Birmingham pressing ahead and signing Pedersen - but have allowed the Dane to play for the club.

EFL chiefs are so far staying tight-lipped on the matter of a points deduction, stating that they are awaiting findings from a Disciplinary Commission before deciding upon further action.