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F1 under investigation from Serious Fraud Office over bribery allegations

Published on 28 Aug 2017 11:29
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By: Chris Soulsby

Formula 1 has confirmed that a pre-investigation has been launched by the Serious Fraud Office (SFO) following a tip-off from a member of parliament. The MP in question is Damian Collins, who is the chairman of the UK Government's Culture, Media and Sport Select Committee.

Back in April the SFO's director, David Green, promised that he would conduct a “thorough examination” into bribery allegations within F1. The Formula One Group recently confirmed that the SFO has “indicated that the matter was currently in its pre-investigation stage and that, in order to consider whether the SFO should open an investigation, it would review relevant material to determine whether or not there are suspected offences that on reasonable grounds involve serious or complex fraud”.

The allegations in question relate to the Concorde Agreement which was signed in 2013 by the FIA and the Formula One Group. The Agreement was originally owned by private equity from CVC, however, has since been sold to Liberty Media in January this year for the sum of £6.2 billion.

The Concorde Agreement sets out the rule making process that governs F1, and was changed in 2013 to the disadvantage of the smallest teams on the grid, with only the top six teams now being able to vote for changes in the sport. The contract also gave the FIA a 1% stake in the Formula One Group for £360,000. When Liberty Media took over F1 in January this year, the FIA made a profit of £62 million by cashing in its stake.

It is perhaps unsurprising that all parties have denied the allegations they are faced with, and the FIA issued this statement in April: “The Concorde Implementation Agreement entered into by the commercial rights holder (CRH) of Formula 1 and the FIA in 2013 introduced a new governance structure for Formula 1 and redefined certain conditions applicable to their relationship, in particular to ensure that the FIA be properly remunerated for its regulatory role.

“Within this agreement, a lump sum payment of $5m was made to the FIA as part of the global consideration received in connection with the renegotiation of the terms of the agreements between the commercial rights holder and the FIA, and of the Concorde Agreement, at that time.

“Following its approval, the Concorde Implementation Agreement came into force and this sum was paid to the FIA and properly accounted for. No individual received any payment out of this sum. Any allegation to the contrary would be defamatory," it added.

“There is no conflict of interest on the part of the FIA with regard to its approval of the change of control of the CRH which has been approved... taking into consideration exclusively the terms of the existing agreements between the CRH and the FIA and the best interests of the Championship... The FIA could only have withheld its consent in the event that the change of control would materially alter the ability of the CRH to fulfil its obligations; it is obvious that the taking of control of the Formula One Group by Liberty does not create such a risk.”

Chris Soulsby

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