F1 Blog 4

The high court judge, Mr Hon. Justice Guy Newey, 'I consider the payments (made by Mr Ecclestone) represent a bribe'.

The case which has been heard in London, brought by German bank Bayern LB, has ruled that the sale of its stake in F1 in 2007 to investment bank CVC, was conducted appropriately and was not undervalued by Gerhard Gribkowsky, the German banker Ecclestone paid to facilitate the sale. Bayern's claim for compensation of £85m was duly rejected. However, the German courts have already decided that the money Gribkowsky received from Bernie ($22.7 million) represented a bribe and as such he is currently serving an 8 year prison sentence.

In April, Ecclestone faces a court case in Germany, where he is alleged to have paid Gribkowsky a bribe and if found guilty it would seem that he too may face some time behind bars. Furthermore, CVC were unaware of this payment until 2011 and only then were they also told that Mr Ecclestone had received a payment of $41 million from Bayern, for consultancy services. CVC were most unhappy about all of this and in their view these payments represented a 'clear breach of our purchase contract'. So,

1. Gribkowsky has been found guilty of accepting a bribe.

2. These payments were not disclosed at the time of the sale.

3. A High Court judge considers the money Bernie paid to Gribkowsky 'represented a bribe'

I am no legal expert, but wouldn't all of this lead you to think that the German court might find Bernie guilty of paying a bribe?

Surely this is the time for Bernie to bow out gracefully and hand the reins of F1 to someone else. There is no doubt that he has done a great many good things for F1 and we should be grateful for his hard work. Would the sport be where it is today without Bernie? Definitely not. However, Justice Newey went on to say that 'I find it impossible to regard him (Mr Ecclestone) as a reliable or truthful witness'. Much of Bernie's defence in the case suggested that the inconsistency of his evidence was a result of his age (83). This is tempered though by Ecclestone's comments after the trial suggesting that if he was unreliable he had done well to be so successful.

Either he is too old to remember what occurred or he is the man to run a multi billion dollar organisation. Which is it?

CVC are a world wide brand. They have invested billions on behalf of its members and are currently worth around $46 Billion US. Do they want one of their higher profile investments associated with someone who might have paid a bribe? Bernie has stepped down from the board, but this is a huge risk for CVC. Who is going to be able to pull all of the parts of the F1 puzzle together and run it efficiently, in the event that Bernie cannot? The answer is probably that it will require a number of people to do the job.

So, is any of this good for F1? No, .....well maybe. A fresh approach at the top may bring benefits of a different nature. Hopefully CVC will involve the teams in the process and we may have some sense of order that is currently lacking. It may be the case too, that circuits, which currently only make money from ticket sales, can receive a chunk of funding that will enable better facilities for the racing. Bernie's supposed inconsistency is seemingly apparent here too.

A condition of the contract awarded to Silverstone was that it had to build a new paddock and pits area. Yet at Brazil, just yards from one of their favelas, no pressure is being put on them to upgrade their frankly antediluvian facilities. Similarly the Indian GP has been axed, when this is clearly one of the largest developing markets on the planet. Honda who join next season with engines for McLaren, have just opened their 2nd car manufacturing plant in India and their 3rd motorcycle manufacturing plant. Their bike division sold over 2 million bikes last year. This year they are predicting 4 million sold in India and the following year 10 million. And there isn't a race in India because....?

CVC must be looking at this and wondering whether the right decisions are being made. The Indian authorities want a race there, the sponsors want a race there, the manufacturers want a race there, the track is actually half decent.......and there isn't a race because....Bernie couldn't agree a deal? Really? McLaren and Honda might even offer to attend for nothing, their share of the TV money could go to someone else. We seem to have forgotten 'win on Sunday, sell on Monday'. Demand for yet more scooters, perhaps a 4th plant, more jobs, the economic benefits, the value of F1 increasing etc..that might be moderately interesting? Wouldn't it? More people watching the races, more exposure for all the sponsors in this rapidly developing economy, doesn't interest them?

Some of you might recall writer and comedian Ben Elton doing a sketch show on television in the UK where one of the sketches was the 'alternative driving test'. One of the elements of this was the drivers ability on command to scream 'COME ON' when sitting in traffic or being stuck behind a caravan or whatever. I can't help thinking that CVC's investors, team owners, sponsors, engine manufacturers, etc, might be staring at the news of Bernie's upcoming trial and screaming .......

Vive la France

John Toad