Gary Neville believes the ownership group at Manchester City will find it very difficult to "retain their status" at the club should the Premier League's ruling over financial breaches still stand following appeal.
The club confirmed on Friday that it has lodged a "comprehensive" appeal to refute the guilty verdict handed down by an independent commission, detailing large-scale financial rule breaking over a nine-year period.
City have protested their innocence throughout the long-running case, which dates back to 2018 and reached a milestone on Tuesday, when the Premier League published their determination that the club were "guilty of all charges related to serious breaches".
According to the Premier League, potential sanctions could include a fine, points deduction or, in the worst possible case, expulsion from the competition.
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But Neville, a co-owner of Salford City in the EFL, says the only appropriate course of action would be to review whether City's owners adhere to the regulatory vetting laws set out by the league, adding their alleged actions have "dragged English football through the mud".
Neville said: "It's hard to see how the Man City owners can comply with the owners' and directors' test in this country if the verdict remains.
"The reality is, because of improper owners of clubs, there are a lot stricter rules in place. It'll be difficult for the Man City owners to retain their status.
"Clubs are protected assets, community assets, because of the meaning of them to fans and people of a city, so owners have to comply with the rules and laws set out in the test.
"The only appropriate punishment is to apply the owners' and directors' test, firstly, and then to look at the achievements over the period and determine whether they should still stand.
"Those two things would have the most direct consequence on English football. If I was Man City, I'd snap your hand off for a fine or points deduction, even if it was 60 points, because that would only damage you for a moment in time.
"To own a football club in this country is one of the greatest responsibilities you can have. It needs to be taken very seriously.
"We can't get bogged down with fines and points deductions, concentrate on the two most important things: the achievements during that time and what happens to the owners and executives who oversaw that period."
The investigatory panel found that City had artificially inflated its revenue, using what the league has called "sham" deals, by more than £900m to circumvent financial fair-play rules.
That then allowed City to buy some of the best players in the world in a period where they dominated English football's biggest prizes.
Neville added: "The Premier League is our greatest export around the world, and now it's being dragged through the mud because the very best team over the last 15 years, as we stand, are guilty of winning titles inappropriately. That's devastating.
"If the guilty verdict stands it won't be real. It'll be a period tainted forever. The achievements themselves are tarnished."
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