The Reds have denied City claims that the Merseysiders wanted to swap Carroll for Carlos Tevez.
Dalglish took a swipe at City. He said: "We're not going to get involved in justifying what people are saying. Get them to justify it, not us.
"We're not talking about any specific incident, but if you are going to do business in any way shape or form, you don't need to disclose it until it's done.
"As (chairman) Tom Werner said, there's no point letting the facts get in the way of a good story, when he was talking about Stewart Downing being bought from a clip off YouTube. Do us a favour."