The club, which as recently as 2011 were a member of the Premier League, is owned by Birmingham International Holdings, an organisation that up until six weeks ago was actively listed on the Hong Kong Stock Exchange.
Birmingham City FC was part-bought by Hong Kong-based businessman Carson Yeung in 2007, but has since encountered difficulty and slipped down to the Championship football division.
An audit for the year to date 30 June 2014 did not identify the missing amount of money, with a statement from the board declaring it is concerned about the situation.
Additionally, the board will now consider setting up an investigation committee to examine further the misappropriation . Hong Kong police have also been brought into the situation and are investigating.
In March 2014 Yeung was found guilty of money laundering by Hong Kong authorities and is currently serving a six-year jail term. That sentence was predated a month earlier by his resignation as president of Birmingham City FC, director of Birmingham City plc and director and chairman of Birmingham International Holdings.
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A statement added: The board considers that the suspected misappropriation may have a material impact on the operation and financial situation of the group. The board will continue to regularly inquire the development of the investigation and re-assess its impact to the operation and financial situation of the group from time to time.
Fans of the Midlands football club have issued a request to the Football League to look into whether Yeung is acting as a shadow director , a situation which could lead to fines, points removal or an embargo on transfers.