Bernie Ecclestone's influence over the board of Formula One's parent company Delta Topco will not be diminished by his dramatic departure from its board according to the details of key documents revealed in the Express by Christian Sylt.
On Thursday Munich's state court announced that Ecclestone will stand trial in April on bribery charges connected to a £26.8m payment he made in 2006 along with his Bambino family trust to Gerhard Gribkowsky, the former chief risk officer of German bank BayernLB.
Ecclestone got details of the prosecutors' claims in May when he was formally charged with bribery. They allege that the £26.8m was paid to Gribkowsky so that he would steer the sale of BayernLB's 47.2% stake in F1 to private equity firm CVC as it had agreed to retain Ecclestone as the sport's chief executive.
The court's decision to put Ecclestone on trial was first reported in German publication Handelsblatt. As Pitpass reported the latest issue of Handelsblatt contains an interview with Ecclestone who told the publication that he was "certain it will come to a trial. After all, I have already been charged. It is now about the date."
This was published on Wednesday morning and it alerted the media that Ecclestone will be going to court. Word certainly got round and one of the outlets which was soon on the case was Sky News. Its city editor Mark Kleinman wrote a piece which exclusively revealed that "Ecclestone's trial is understood to have been provisionally scheduled to begin on April 23. The F1 boss will step down from the board of the company which runs the sport pending the outcome of the trial, people close to the situation said, although he will remain in charge of F1's day-to-day management."
Regular Pitpass readers may remember that Kleinman is well-known in industry circles for overusing the word 'exclusive'. Likewise, although Kleinman only writes about F1 occasionally, his track record is patchy to say the least as many of his articles about the sport come to nothing. Most famously he wrote that Rupert Murdoch's News Corporation was planning to buy F1 and that former M&S boss Stuart Rose had been in talks with CVC about becoming F1's chairman.
Last year we were treated to an 'exclusive' that "a private equity firm owned by the state-backed Lloyds Banking Group is in talks to buy a big stake in Silverstone." Then there was another about CVC "teaming up with one of the biggest shareholders in the McLaren sports car group to form a £1.2bn offer for IMG, the sports rights agency." Finally came the news that Ron Dennis "is understood to be targeting a deal that would see him acquiring the 25% stake in McLaren Group owned by Mansour Ojjeh, a Saudi businessman."
Make no mistake, these are all interesting stories which make good talking points. However, not one of them has yet been confirmed and come to something. Silverstone hasn't announced that Lloyds has bought a stake in it. Dennis hasn't announced that he has bought Ojjeh's 25% stake in McLaren and CVC certainly isn't going to be announcing that it has bought IMG as although the sports rights agency was sold in December CVC wasn't the buyer.
However, the Sky News report about Ecclestone stepping down from the board of Delta Topco was an exception as it very quickly became reality. The Handelsblatt reporters aren't the only ones who knew it was going to happen. Before the Sky News piece was broadcast certain directors of Delta Topco were formally informed by email that Ecclestone's trial would begin on 23 April and the official response to this soon came to light.
On Thursday Delta Topco issued a press release confirming that Ecclestone "will step down as a director with immediate effect, thereby relinquishing his board duties and responsibilities until the case has been resolved." It added that he would continue to run the business on a day to day basis but would be subject to increased monitoring and control by the board.
The press release drove a massive amount of exposure which generally reported that Ecclestone had lost control of Delta Topco. However, many F1 insiders questioned the likelihood of this and they were right to do so. In fact, the rules which govern Delta Topco show that Ecclestone never had control of the company so he could not lose it.
CVC only has a 35% stake in Delta Topco and its directors occupy just 5 of its 17 board seats which are also filled by well-known independent non-executive directors such as advertising manager Martin Sorrell. Despite not having a majority of the shares or board seats of Delta Topco, CVC has complete control of the company.
This is revealed in Delta Topco's internal regulations which are known as Articles of Association. They state that CVC's shares entitle it to appoint representatives, known as I Directors, who can "exercise one vote more than the total number of votes exercised by the other directors." The Articles of Association add that the purpose of this is "to ensure that the I Directors will always have sufficient votes to pass a resolution of the board."
Ecclestone says: "I was the one that put the press release together. I was the one that suggested I'm standing down because it needed to show we are being serious. We don't want the court to think I couldn't give a stuff."
He added: "I said I would resign from the board of Topco if and when the trial comes up in Germany. Apart from that, everything stays the same. I am still the CEO, I am still running the company. Everything is the same."