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NEWS
MOTORSPORT: Ecclestone charge a snag in Melbourne GP talks
F1's 82-year-old chief has been charged with bribery, casting a cloud over negotiations for a renewal of Melbourne's Grand Prix contractHeightened focus on whether supremo can remain in charge
As the Victorian government weighs whether to renew its Formula One grand prix contract beyond 2015, F1 supremo Bernie Ecclestone has been charged with bribery in Germany.
The case against Ecclestone is not certain to proceed but nonetheless will focus attention on whether the 82-year-old should remain at the controls of F1.
He has admitted previously that he could not continue at the helm if arrested, but there is no obvious successor.
Ecclestone does not deny paying former German banker Gerhard Gribkowsky US$44 million in 2005. The question is whether the money was a bribe to ensure Gribkowsky steered a majority of shares in the F1 business to private equity firm CVC.
Ecclestone has long claimed the payment was to deter Gribkowsky from going to British tax authorities with what he reckoned would have been false allegations about his financial affairs.
The latest development in the long-running story comes as Victoria’s conservative government has to decide whether it wants to extend its deal with Ecclestone for the grand prix, which has been held in Melbourne each year since 1996.
That event is now costing Victorian taxpayers about $60 million a year – that’s the bottom-line result, not Ecclestone’s sanctioning fee – as the red ink has mounted since Melbourne pinched the GP from Adelaide, which had staged it from 1985 until 1995.
Another headache for the Melbourne race organisers is the imminent retirement from F1 of veteran Australian driver Mark Webber and uncertainty over whether younger Australian Daniel Ricciardo will replace him. Ricciardo will drive for Red Bull Racing at this week’s F1 testing at Britain’s Silverstone while his rival and Scuderia Toro Rosso teammate, Frenchman Jean-Eric Vergne, will not.
However, 2007 world champion Kimi Raikkonen, now with the Lotus-Renault team, is the favourite to partner the 26-year-old triple world champion of the past three years Sebastian Vettel at Red Bull, after Webber’s exit.
Ecclestone being charged with bribery and breach of trust also could again postpone attempts to float F1 on the Singapore stock exchange. Gribkowsky already is in jail in Germany, having been convicted of accepting a bribe from Ecclestone and evading tax.
Gribkowsky had been the chief risk officer for Germany’s BayernLB, the major bank in a syndicate that assumed ownership of most of the shares in F1 after the collapse of the previous owner of them, the German media empire Kirch.
Ecclestone’s German lawyers have a month to respond to the formal allegation that the money he gave Gribkowsky was a bribe. It could then be another month before a decision by German prosecutors on whether to proceed against Ecclestone.
Separately BayernLB is seeking $400 million in damages from Ecclestone, claiming that the shares were not sold for full value.
Ecclestone also faces a massive legal action from an American-led syndicate, which has claimed it was prepared to pay more for the shares than CVC.
After the 2005 transaction CVC had a 63 per cent stake in F1 but it has since reduced that to about 35 per cent as it sold some shares to America’s BlackRock and Waddell & Reed and Norway’s Norges Bank in preparation for the proposed public listing, which could have valued the business at about US$10 billion.
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Written byGeoffrey Harris
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