LONDON (Reuters) - Shares in Birmingham City football club were suspended on Thursday after its directors David Sullivan and Karren Brady were arrested in a police investigation into football corruption.

In a statement, the London Stock Exchange said trading in the Premier League club's shares on its junior market AIM was temporarily suspended at 7:30 a.m.

The shares closed at 35.5 pence on Wednesday, giving it a market capitalisation of 28.9 million pounds.

Birmingham City said its co-owner Sullivan and managing director Brady "deny absolutely any wrongdoing".

It added: "The City of London Police investigation is focusing on payments to a football agent and two players, dating back to 2002-2003.

"There is absolutely no allegation that any director of the company or the club itself have benefited financially from any of this activity.

"The club and its directors are co-operating fully with the police in this investigation and will continue to do so."

City of London Police said on Wednesday that two people had been released on bail.

"A 59-year-old man and a 39-year-old woman were today arrested on suspicion of conspiracy to defraud and false accounting, as part of the City of London Police's ongoing investigation into football corruption," it said.

"A total of seven other people remain on bail in connection with the investigation."

Previous arrests include Harry Redknapp, manager of FA Cup finalists Portsmouth, in November. He has always insisted that he has done nothing wrong and has not been charged.

Clubs investigated last year include Newcastle United and Scottish league leaders Rangers.

(Reporting by Rex Gowar and Peter Griffiths; Editing by Steve Addison)