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Premier League club Arsenal is helping a Chinese investigation, after it was potentially caught up in a fraud around its sponsorship deal with carmaker BYD.

"We are investigating the situation and discussing it with senior level BYD representatives... involved in the launch of the partnership," it said.

A woman has been arrested by Shanghai police on suspicion of contract fraud and faking company seals, BYD said.

BYD is one of China's biggest carmakers and is a producer of electric vehicles.

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BYD, which stands for Build Your Dreams, designs, develops, manufactures and distributes cars, buses, commercial vehicles and rail stock.

The Arsenal-BYD partnership was announced to great fanfare in April this year, with the club saying it had reached a deal with "the world's best-selling electric vehicle manufacturer".

As part of the deal BYD would receive pitch-side LED signage and branding on dugout seats at the Emirates Stadium. It would also have access to Arsenal Legends for special promotional events in China.

BYD said last week that a woman posing as the marketing manager of its Shanghai branch had signed multiple contracts with advertising agencies to promote the company.

"BYD has informed Arsenal that they believe they have been the victim of a fraud in relation to various advertising agreements," Arsenal said in a statement on its Chinese website. It gave no further details of the alleged fraud or any impact it may have on its sponsorship deal.

The individual at the centre of the allegations has never has been an employee, nor been given authorisation to conduct business in its name, Shenzhen-based BYD said in a statement to the Hong Kong stock exchange.