Pressure "continues to build" on F1 CEO Bernie Ecclestone with an American private equity firm the latest company to instigate legal action off the back of ongoing bribery allegations in Germany, according to Tom Cary of the London TELEGRAPH. Bluewaters Communications Holdings has filed a $650M lawsuit at the Supreme Court of N.Y. State, "arguing that it lost that amount after Ecclestone paid a $44M bribe to German banker Gerhard Gribkowsky in '06 to ensure that BayernLB’s stake in F1 was sold to present owners CVC Capital Partners." Bluewaters said it should have been sold the stake as it had offered "10% above any genuine bona fide offer put forward by any other competing buyer." The action is against Ecclestone, CVC Capital Partners, Ecclestone-run companies Alpha Prema, Alpha Topco and Delta Topco, Gribkowsky, and Bayerische Landesbank (TELEGRAPH, 11/20). BLOOMBERG's Linda Sandler noted F1 racing "was valued at $10B" by Bluewaters in the lawsuit. Bluewaters' current valuation "may aid investors trying to sell F1 stakes." CVC has said that "it was seeking to take F1 public in Singapore." Financial services firm Lehman Brothers Holdings, which is liquidating assets to pay creditors, holds a stake of about 15%. Bluewaters said it was "encouraged" by JPMorgan Chase & Co. and Lehman to buy their shares in a vehicle that controlled F1 around Dec. '04, when Ecclestone lost legal control to them and BayernLB. Although a Bluewaters representative assembled $1B in financing for the purchase, and made offers to the three lenders, "the stake went to CVC as a result of Ecclestone’s efforts, according to the complaint." Ecclestone is traveling and "could not immediately be reached for comment on the lawsuit." Lehman officials declined to comment, and JPMorgan spokesperson Joseph Evangelisti "did not immediately respond to an e-mailed request for comment" (BLOOMBERG, 11/19).
The Korean F1 Grand Prix "racked up substantial operating losses" in October, "the third year running it has finished in the red," potentially threatening its place on F1's calendar, according to Alastair Himmer of REUTERS. Race organizers revealed that the South Korea race, first run in '10, "returned operating losses of 39.4B won ($36.4M)." Race organizers said, "There are many concerns regarding the operating loss, the loss for a third straight year is only a short-term effect. In the long-term, the F1 event will bring more benefits to the country. It will not only pave the way for South Korean car industries in the future but also help foster new industries." The Yeongam circuit, 400km south of Seoul, "has an initial contract of seven years, with a five-year option that could keep the race there until '21." However, it "has been plagued by problems, even before opening in '10, when construction of the circuit was only just finished in time for its maiden race." South Korean organizers "have expressed dissatisfaction at the terms of their contract with F1, particularly over the cost of race-sanctioning fees." However, their complaints "have fallen on deaf ears" with F1 CEO Bernie Ecclestone (REUTERS, 11/21).
SLOW TICKET SALES: The SID reported the race in Yeongam suffers from slow ticket sales and "lack of interest" from South Koreans. In '10 the race "had a loss of about $67M, while the '11 edition led to an operating loss of about $56M" (SID, 11/21). South Jeolla province council member Seo Dong-wook said, "Just because the amount of loss was cut from 70B won to 40B won, I am not sure we can call this year's race a success. We will need to take some fundamental steps to change it" (YONHAP, 11/21).