Coates said City sold Tuncay to Wolfsburg for £4.4m during the transfer window because he wanted to play in Germany and because Tony Pulis couldn't offer him regular first-team football.
He told The Sentinel: "Tuncay wanted to leave and he wanted to go to Germany. He was very anxious to play a lot of games and Tony Pulis didn't feel he was in a position to guarantee that."
And on Gudjohnsen, who is now at Fulham, Coates added: "We thought he was a good signing, but it didn't work out. We managed to get him another club and he was keen to do that. It worked out well for us because there was a saving to be had."