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Serious Fraud Office to investigate FIA deal?

NEWS STORY
28/04/2017

It is understood that the Serious Fraud Office, an independent Government department that investigates and prosecutes serious or complex fraud and corruption, is considering opening an investigation into the deal which saw the FIA reap a $80m dividend from F1 sale.

The move follows weeks of speculation over the 2013 deal which saw the sport's governing body handed a 1% stake in the sport for a nominal cost of 358,800 along with a 3.9m lump sum as part of the Concorde Implementation Agreement between the FIA and the sport's commercial rights holder the Formula One Group.

The involvement of the Serious Fraud Office follows allegations that the lump sum and stake, considering the FIA's role as an independent body, could be construed as a bribe.

The claim is backed by the likes of Jonathan Fisher QC, a barrister who specialises in corporate and financial crime, and Damian Collins, the MP who chairs the Culture, Media and Sport Committee.

While Fisher has told ITV News that the deal could have breached sections 1, 2 and 7 of The Bribery Act, Collins has written to the Serious Fraud Office to ask it to assess whether the agreement amounted to a bribe.

The 2013 Concorde Implementation Agreement was always seen as controversial in that it gave increased power to the sport's owners and the FIA whilst giving the smaller teams - two of which subsequently folded - no say in proposing changes to the regulations.

Previously they had input as part of the F1 Commission, but under the Concorde Implementation Agreement it is the six teams that Comprise the Strategy Group that have the say while the F1 Commission is merely there to rubber-stamp or reject its proposals.

The FIA's stake in the sport didn't come to light until January following the sale of the Sport to Liberty Media. Ahead of the sale, Liberty made clear that a number of potential hurdles had to be overcome before the sale could be completed including the approval of the FIA.

Since the $8bn deal was likely to reap a an $80m dividend for the sport's governing body, it is understandable that some might argue there was a conflict of interest, while others might take the claim a step further.

Bernie Ecclestone insists he was not involved with the negotiation of the deal, while CVC told ITV News: "The agreement does not breach the Bribery Act, and any suggestion to the contrary can only be based on a misunderstanding of the facts and is false. We have recently confirmed this with our outside legal advisers.

"Any suggestion that CVC or Mr Mackenzie was involved in bribery, whether through these arrangements between F1 and the FIA or otherwise, would be baseless and wrong."

“The figures quoted, including the equity stake, were negotiated to ensure that the FIA could continue to provide and enforce a long-term regulatory framework, which provides safety and stability for the benefit for all key F1 stakeholders including teams, drivers, other partners and, of course, the F1 commercial rights holder itself," added the Formula One Group in its own statement.

Whatever the whys and wherefores of the deal, the fact is that the resultant agreement saw the smaller teams lose out not only financially but also in terms of having any say in proposing changes to the regulations.

While Sauber and Force India have taken their concerns to Europe, it all comes too late for Caterham and Manor.

As if adding insult to injury, earlier this week the Strategy Group, which came into being because of the agreement, and which has essentially excluded the likes of Sauber, revealed that representatives from the non-member teams will now be invited to meetings of the group "to have access to the discussions, demonstrating the effective commitment of both the FIA and the Commercial Rights Holder to improve transparency in the sport".

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