A defiant Leicester City have issued legal proceedings against the Premier League and English Football League after being dismayed by the action taken by the two organisations. Leicester are facing the potential ­double whammy of being docked points by both leagues owing to alleged financial breaches.

Leicester, who were relegated from the top flight last season, have been placed under a transfer embargo by the EFL for allegedly exceeding the upper loss threshold in their profitability and sustainability calculations relating to the 2023-24 season.

Related: Leicester City charged by Premier League over alleged breach of PSR rules

Leicester say they dispute “the EFL’s entitlement to impose this­ ­constraint, which is both restrictive and premature”. The accounting period for 2023-24 ends on 30 June. Unless the club generate millions through sales before then, they are at risk of a points deduction from the EFL.

On Thursday the Premier League charged Leicester with breaching profitability and sustainability regulations (PSR) for their last three years in the division. Top-flight clubs are permitted to lose a maximum of £105m across a three-year cycle. It is thought any penalty imposed in relation to this would come into effect next season and could be ­administered by the EFL if the club have not been promoted.

A Leicester statement read: “LCFC has been compelled today to issue two urgent legal proceedings against the Premier League and the EFL. LCFC will be seeking that each of these proceedings is determined by an appropriate and fully independent legal panel.

“The club is committed to ensure that any charges against it are properly and proportionately determined, in accordance with the applicable rules, by the right bodies, and at the right time.

“While LCFC would prefer the ­proceedings to be in public, so its ­supporters and the wider world can be informed about the important issues of football governance that will be considered, the relevant rules require that these proceedings are conducted confidentially, and LCFC will therefore not be able to comment further about them at this stage.

“We reaffirm the club’s position that we will continue to fight for the right of Leicester City and all clubs to pursue their ambitions, particularly where these have been reasonably and fairly established through ­sustained sporting achievement.”