Bernie Ecclestone lost his battle to retain control of his Formula One empire yesterday after a judge upheld a claim by three banks demanding a say in who runs the multibillion-pound business.
The High Court in London held that Mr Ecclestone, who has ruled Formula One for nearly 30 years, had “no defence” to the banks’ claim over the make-up of the board of Formula One Holdings (FOH), the company that governs the commercial side of the sport.
Mr Ecclestone was later refused permission to challenge the ruling in the Court of Appeal. His lawyers warned that the judgment could leave Mr Ecclestone’s family trust company, Bambino Holdings, without a majority on the board of FOH.
The 73-year-old entrepreneur has held commercial control of the sport since establishing the Formula One Constructors’ Association in 1974 and has negotiated deals with circuits, sponsors, teams and the world governing body to help the sport become the multibillion-pound industry it is today, as well as making him a very wealthy man.
With the creditor banks in control, FOH is thought likely to take urgent steps to heal the rift with GPWC – formed by the Ferrari, Renault, Mercedes and BMW teams – which is threatening to launch a rival series to Formula One.
Bayerische Landesbank, JP Morgan and Lehman Brothers are the three banks in the consortium which operates as Speed Investments and collectively own 75 per cent of FOH.
Until now, Bambino had maintained a majority on the FOH board, despite owning only 25 per cent of the shares. But Mr Justice Park yesterday gave summary judgment for Speed on its claim that Bambino’s appointment two years ago of two Swiss nationals, Luc Argand and his wife Emmanuele Argand-Rey, to the eight-strong board of FOH was invalid.
Speed had stated that, under FOH’s articles of association, Bambino, as a holder of “B shares” in FOH, had the right to appoint two subsidiary directors to the board in addition to the ordinary directors.
That right to appoint “B subsidiary directors” was exhausted by the appointment of Mr Ecclestone and Stephen Mullens, and therefore Bambino had no right also to appoint the Argands, it was argued.
Bambino and FOH refused to recognise Speed’s two chosen appointees, arguing that Mr Ecclestone and Mr Mullens were and remained ordinary directors and were mistakenly described as B directors in the articles of association.
At the start of a lengthy oral judgment, Mr Justice Park said he agreed with Speed that Bambino and the Argands had “no real prospect” of successfully defending Speed’s claim and that the issue over the composition of the board should not go to a full trial.