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Mercedes welcomes Ecclestone's decision to step down

NEWS STORY
26/01/2014

Mercedes has revealed that it is satisfied with Bernie Ecclestone's decision to resign from the board of Formula One according to an article in the City A.M. newspaper by Christian Sylt.

It appears to put the brakes on rumours that the German manufacturer could pull out of F1 as a result of Ecclestone's legal predicament.

Last week the state court in Munich announced that Ecclestone will be put on trial in April for allegedly paying part of a $44m bribe to German banker Gerhard Gribkowsky so that he would steer the sale of F1 in 2006 to his preferred buyer, the private equity firm CVC.

In June 2012 Gribkowsky was sentenced to eight and a half years in prison for receiving the alleged bribe. It triggered reports that Mercedes' future F1 future could be in jeopardy and the risk was far from theoretical.

This is because the statutes of Mercedes' parent company Daimler state that it "does not tolerate the immoral or corrupt practices of its employees or its business partners." It is of particular significance because in 2010 Daimler agreed to pay a total of $185m to settle charges that it made at least $56m in improper payments to obtain government contracts for its vehicles.

Ass Pitpass reported at the time, Laurenz Schmitt, a corporate lawyer for Linklaters in Munich, confirmed that "Ecclestone's bribery payments would fall under this company guideline." Another legal expert said that "if Ecclestone is charged with bribery Daimler would have to withdraw from F1."

Ecclestone headed off this threat when the trial against him was announced. He denies paying a bribe but agreed to stand down from the board of F1's parent company Delta Topco until the trial is over. In the meantime he will continue to run the sport on a day-to-day basis with increased supervision.

A Mercedes spokesperson said that "with the start of the court procedures Bernie Ecclestone is suspending his duties as director of Delta Topco with immediate effect in accordance with the board. The chairman of the supervisory Board and his deputy chairman will furthermore execute enhanced control functions. We welcome these measures."

In recent years Mercedes has had a tense relationship with Ecclestone. It has been fuelled by his favourable treatment of its rivals in commercial agreements which came into force last year.

According to the prospectus for the stalled flotation of F1, a dedicated prize fund of at least $100m annually was allocated to "each of the top three teams determined primarily on events won in the four seasons prior to 2012." Mercedes comes fourth under this methodology even though it won the F1 championship in 2009 under its former name of Brawn GP.

Tensions eased when Ecclestone confidantes Toto Wolff and former champion Niki Lauda bought into Mercedes' F1 team at the start of last year. As Pitpass revealed Ecclestone tried to further smooth things over by giving a seat on the Delta Topco board to Daimler's chief financial officer Bodo Uebber last year but the threat of Mercedes leaving still hung over F1. Ironically, although Ecclestone is no longer on the board, Uebber is still there.

Business news from @formulamoney

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1. Posted by Stitch433, 27/01/2014 8:08

"For a comapny who has no hesitation in selling and delivering armoured cars to dictators around the world this is a bold statement! To me that is an example of extreme hipocrisy. That is my humble opinion."

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