Fifa has accused Malaysia of falsifying citizenship documents so seven foreign-born players could play for the national team.

Football’s world governing body had fined and suspended the players in late September and on Monday released a report justifying its action.

Fifa said the Football Association of Malaysia (FAM) had forged birth certificates to make it look like the players’ grandparents were born in Malaysia. This, the body said, “constitutes, pure and simple, a form of cheating”.

But FAM said the discrepancies arose from an “administrative error” and that it would appeal Fifa’s penalties. It maintained that the players were “legitimate Malaysian citizens”.

Fifa’s “grandfather rule” allows foreign-born football players to represent countries that their biological parents or grandparents were born in. This aims to prevent national football teams from simply importing foreign players to boost performance.

Fifa investigated the players following Malaysia’s 4-0 win against Vietnam in June, in response to questions about their eligibility.

In September, the Fifa disciplinary committee suspended the seven players for a year and ordered them to pay a fine of 2,000 Swiss francs ($2,500; £1,870). At the time, Fifa did not share details about the reason for their suspension, only that it related to “doctored documentation”.

The football governing body ordered FAM to pay 350,000 Swiss francs ($440,000; £330,000).

In recent years, South East Asian countries have launched recruitment drives for naturalised players, hoping to emulate Indonesia’s strategy of recruiting Dutch-born footballers from the Indonesian diaspora.

Earlier this year, FAM sent Fifa birth certificates showing that the grandparents of its seven players had been born in Malaysian cities like Penang and Malacca.

But Fifa said investigators obtained original birth certificates of the grandparents, which showed that they were born in countries like Argentina and Spain – all corresponding with the players’ birthplaces.

The seven players include Spanish-born Gabriel Felipe Arrocha, Facundo Tomas Garces and Jon Irazabal Iraurgui, Argentinian-born Rodrigo Julian Holgado and Imanol Javier Machuca, Netherlands-born Hector Alejandro Hevel Serrano and Brazilian-born Joao Vitor Brandao Figueiredo.

Malaysia’s sports minister Hannah Yeoh said Fifa’s findings had tarnished the country’s image. She said the ministry would wait for FAM’s appeal to be over before making any official statement.

“I also understand that all local football fans are naturally angry, disappointed and want to see improvements,” she told a news conference on Tuesday, according to government news agency Bernama.

Malaysia is set to play against Laos in another Asian Cup qualifier this week – though the Malaysian team’s line-up will look much different without the sanctioned players.