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CVC investors 'worried' by lack of communication over F1 'bribery' scandal

It has been reported that investors in CVC Capital Partners are beginning to get 'worried' by the lack of communication from F1's majority owners over the current 'bribery' scandal rocking the sport
Investors in CVC Capital Partners are reportedly getting 'worried' by the deafening silence from F1's majority owners over the current investigation into bribery allegations surrounding the sale of the sport's commercial rights five years ago.

F1 supremo Bernie Ecclestone has been accused of bribing prominent banker Gerhard Gribkowsky to deliberately undervalue the shares sold by German bank Bayerische Landesbank (BayernLB) to private equity firm CVC back in 2006. Shortly after the sale was finalised, CVC installed the British billionaire at its helm.

Having dutifully held his silence for several months in-line with prosecutors' requests, Ecclestone has recently finally spoken out to protest his innocence and to assert that the money he paid Gribkowsky – totalling some $44 million (£27.3 million) in the form of two 'fake consulting contracts' – was not a bribe. The Formula One Management (FOM) chief executive maintains that he has 'nothing to hide' and consequently, 'nothing to worry about' [see separate story – click here].

According to the Financial Times, however, investors in CVC are now calling upon the organisation to keep them informed and enlighten them with regard to what is going on. To-date, the only statement offered has been to reassure that CVC had 'no knowledge of, nor any involvement in, any payment to Mr. Gribkowsky' – and no finger of blame has ever been pointed at the company.

The FT claims that investors are questioning CVC's 'paralysed' reaction to the accusations, and are 'angry that Donald Mackenzie, the private equity group's management partner responsible for the deal, is not willing to replace Mr. Ecclestone as chief executive of Formula One Management'. Mackenzie was said to have been 'incensed' when the scandal broke.

“There has not been much communication from CVC on F1,” SPEED.com quotes an unnamed European investor as having told the 'paper, “and we are slightly worried about it. We do not know more about this than what we read in the media.”

The investor added, however, that 'it is one of those cases where investors are willing to put up with a lack of communication as CVC has simply shown such great returns'.



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Caroline - Unregistered

July 28, 2011 7:37 PM

No they're not, Mark Kleinman, business editor of Sky News says they are ... And you don't have to be a genius to work out why he spinning the story that way.



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