The flamboyant boss of the Formula One companies, charged with corruption, has indirectly told Norway’s Oil Fund managers and their critics that they don’t need to fear for the safety of the fund’s controversial investment in his complicated Formula One organization. Bernie Ecclestone claims he’s still in charge, although Oil Fund boss Yngve Slyngstad now thinks that’s part of the problem.
In a letter that he simply signed “Bernie,” Ecclestone wrote that he was “sorry for anyone that felt that they have been adversely effected” by the corruption charges against him, adding that “I am sure they have not.” The letter was sent last week to Goran Skaalmo, one of the reporters for newspaper Dagens Næringsliv (DN) that broke the news about the Oil Fund’s investment of NOK 1.8 billion (USD 300 million) in Delta Topco, part of a mass of companies controlled by Ecclestone that ultimately own the rights to Formula One racing.
The investment has been viewed as highly risky and out of character for an investor like Norway’s Oil Fund, one of the world’s biggest sovereign wealth funds that’s supposed to provide pensions for future generations of Norwegians. Slyngstad, who admitted to DN last week that the fund’s investment in Delta Topco seems to have stalled, said he wished Ecclestone had been suspended but claimed he had at least been stripped of his executive powers.
Not so, according to the 84-year-old Ecclestone himself. “The facts are clear,” he wrote to DN’s Skaalmo. “I resigned from the board of Delta Topco and associated board. My position as CEO of Formula One Management has not changed.”
Ecclestone, facing corruption charges in a German court, also stressed that he is pleading innocent and is intent on clearing his name. “What seems to escape people is that I have been accused, but not convicted, of a felony that I did not commit,” Ecclestone wrote. He added that he was “successful” in defending himself against another case brought against him in a UK court.
A planned stocklisting of Delta Topco in 2012 remains stalled, at least until the German corruption case is resolved. Although Slyngstad remains optimistic that the listing will proceed at some point, the Oil Fund’s shares in Delta Topco currently have little or any market and thus are of questionable value.
While Slyngstad called for the suspension of Ecclestone, others familiar with the complex Formula One web of companies think the Oil Fund will be better off with Ecclestone remaining in place. “He is the only one who understands how Formula One functions, and the only one as of today who can keep it together,” Christian Sylt, author of the annual report Formula Money, told DN. Sylt otherwise referred to Formula One’s business model as “a house of cards, where the various cards are agreements between competing groups like the Formula One teams, TV companies, organizers, speedway owners and even competing sports branches.”
Sylt claims the only way the organization can survive is through a “controlled” takeover with Ecclestone handing portions of it over to new owners. “The risk is still there, regardless,” Sylt told DN. “Bernie is 84 years old. He can die or land in prison. But the biggest risk is what a new boss would do.”
Meanwhile, Oil Fund boss Slyngstad continues to face criticism for his decision to invest in Formula One and for his management of the fund, even though it has reported record returns. DN has reported that the fund itself and its “Capital Strategies” group, which Slyngstad heads, is nearly as secretive as Formula One, that there was enormous secrecy around the Formula One deal struck in 2012 and that the Oil Fund’s risk managers were run over during the process. Among the documents that the fund, part of Norges Bank, has refused to turn over to DN, it reported, are travel receipts for the fund’s bosses who traveled to Formula One races in 2012 and 2013.