The club announced the signing of Pedersen for an undisclosed sum on June 25, having beaten off a number of other interested parties.
The signing was made after weeks of speculation, with Pedersen being photographed holding a scarf up in a box on the Kop along with club CEO, Ren Xuandong.
This website has since learned from multiple sources that the club have in fact not managed to register the player yet with the EFL and are now facing a full transfer embargo.
It is understood that the club were previously under a “soft embargo” to give the owners and backroom staff a chance to fix the situation surrounding the financial fair play (FFP) result.
However, any deadline to sort out FFP problems lapsed without any agreement between the club and the EFL and as such, the club have now been placed under a proper transfer embargo.
This issue has come against a background of what has been described by club insiders as a “toxic turf war” at St Andrew’s.
Disagreements between CEO Ren Xuandong and senior backroom staff based at St Andrew’s have led to senior staff being excluded from various duties including any dealings with transfers, which has led to this impasse.
Ren has previously had a history of issues with his Winning League Academies in China, and it is understood is still under threat of a civil suit from various parties due to the ongoing problems with those companies.
However, it is understood by this website that Ren has been backed solidly in this argument by Birmingham Sports Holdings chairman Zhao Wenqing.
Sources close to this website have confirmed that Zhao has asked for unity behind the CEO despite the ongoing resentment behind the scenes.
This website has reached out to both the EFL and Birmingham City for an official comment.