Another fine illusion from Bernie?

Bernie Ecclestone is recognised as being a master illusionist. Indeed, it has long been recognised in the Formula 1 paddock that the 83-year-old regularly makes contentious comments to deflect attention from the (very) real issues at hand.

When, for example, Cape Town was mooted as a possible grand prix host, it soon became clear that South Africa's Mother City was being used as a pawn in contractual negotiations with Melbourne politicians, who hummed over contract extensions.

When faced with the prospect of an iconic southern hemisphere city on the same latitude snatching the race away from Albert Park, they stretched for their pens PDQ, signing a contract that dwarfs anything the fairest Cape may have offered.

Ditto Shanghai: when the circuit's contract was up for renewal, its officers vacillated; come race day Ecclestone cut short appointments and flew to Beijing, ostensibly to check whether the Olympic Park offered an alternative. Said infrastructure could, of course, have been checked out by any number of minions at any time. Whatever, the contract was extended.

Thus, when sectors of Germany's commercial media on Thursday published wide-reaching interviews with the usually reserved Ecclestone, it was clear something was afoot, particularly when talk (conveniently?) turned to the Nurburgring.

Currently in the hands of administrators after political ambition overruled common sense, the classic motorsport park is up for auction, and Ecclestone willingly admitted to having tendered for the operation, which includes the infamous 'Green Hell' Nordschleife circuit, the grand prix facility and a wildly optimistic theme park/hotel complex that is unlikely ever to wash its face.

Eccletone will stand trial in April © LAT

But when talking about the offer, Ecclestone freely swaps between singular and collective senses, making it unclear who the 'we' referred to actually is (see interview extract below).

Could it be Alpha Topco, the holding company of Formula 1's commercial rights, majority controlled by venture fund CVC Capital Partners?

The Ecclestone family trust, which also owns Paul Ricard circuit in France?

Is he talking about himself, whom he has been known to refer to as 'we' in the paddock?

Whichever entity is being referred to, it could conceivably cause issues, for direct involvement in the 'Ring by CVC may bring Alpha Topco in conflict with Formula 1's primary European customer base, many of whom are publicly-owned or backed, thus possibly sparking an unwelcome EU investigation. Already companies overseen by him have been forced by the Commission to amend certain contracts.

Equally, if Ecclestone has in any way involved the family trust, this would be in breach of UK tax laws, the very reason he allegedly agreed to pay a 'shakedown' fee demanded by banker Gerhard Gribkowsky, more of which anon.

Finally, would Ecclestone, at 83, acquire the circuit in his own right, particularly given that overseeing its rehabilitation is a full-time task, one the reputed micro-manager would have scant time for given his overriding commitments to paymasters at CVC?

So the true identity is, as is invariably the case with an individual whose fax header says simply 'Mister E', a mystery...

But various warm comments made earlier this week by long-time Ecclestone ally Christian Horner - the only team boss to attend Ecclestone's 2012 marriage to Fabiana Flosi, and the couple's vacation companion during Formula 1's 2013 summer break - both on television and during a leader's breakfast address earlier this week made clear something big was brewing.

So it was. On the very day the interview appeared in Germany, Munich's state prosecutor office announced that Ecclestone had been formally charged with bribery and embezzlement and would stand trial, likely in late April. The accused is invariably given advance notice, particularly in such high-profile cases.

Ecclestone would have been aware of impending doom, and thus the sudden German media offensive, coupled with various disclosures such as the Nurburgring offer - possibly to elicit sympathy in Germany - and Horner's repeated cooing in public that "Bernie is absolutely the best and only guy to do what he does, to take Formula 1 to the global reach that the sport has achieved..."

Ecclestone and Horner during the FIA gala © LAT

But what happened next bemused F1 insiders even more, for rather than take the decisive action necessary, namely relieve Ecclestone of his duties to enable him to, as per CVC's release, "vigorously defend the case", CVC has taken the soft option of no effective action.

After all, how can he "continue to run the business on a day to day basis", even if "subject to increased monitoring and control by the Board" if on the (rumoured) opening day (April 24) of the trial of his life the sport is busy regrouping following a quartet of opening races characterised by the most swingeing rule changes in half a century?

Surely the octogenarian is owed maximum time to prepare for the ordeal, one that could besmirch the sport's global reputation and place CVC investments at substantial risk were the verdict to go against him.

Therein lies the rub: CVC seems to have no clue about a business it paid (borrowed) billions to acquire; worse, save for its executives turning up at glamour races (or when things get hot), they have made little effort at understanding the most profitable in a portfolio comprising a raft of multinational brands such as Virgin Active and, before its listing, Samsonite.

So Ecclestone even now has been left to his own devices to run Formula 1's commercial rights, effectively as he sees fit, for his minders (CVC chairman Peter Brabeck Letmathe and deputy chairman Donald Mackenzie) are unlikely to have any more time to oversee the company than they have had thus far.

As long as dollars rolled in they saw no need to intervene, despite having acquired the Formula One Group when its mainstay was well into his seventies, with a known history of heart disease, so why would that change now? If allegations do not faze them, why would a trial?

Good corporate governance calls for the appointment of (at least) an understudy and the implementation of a succession plan - in its (aborted) IPO prospectus it admits to being vulnerable in this regard, yet failed to take remedial action. CVC decided to wing it, which is utterly inexcusable given the billions - mostly made up of team and sponsor investments - riding on the sport.

Fabiana Flosi, Ecclestone's wife © LAT

Much as CVC in court recently projected itself as saviour of the sport, last year it was accused by Force India's Robert Fernley - one of the most level-headed team officers around, who has seen it all since the 1970s - of "raping [commercially] the sport".

CVC's failure to make significant investments in F1 and continued reluctance to implement a succession plan despite F1's £400m annual return suggests he was on the button.

If Ecclestone's age and health concerns did not spur CVC into taking decisive action, one would have thought the arrest of Gribkowsky and the Munich court's verdict would have galvanised the company into action.

No. Instead CVC waited until after the prosecutor's office confirmed the charges before accepting Ecclestone's resignation from the Alpha Topco board, this despite it becoming clear in May last year that some extremely serious charges were being investigated.

The crux, though, is that Ecclestone will still be in day-to-day charge of the sport, so in effect nothing has changed.

One wonders how Daimler, which has an extremely stringent corporate governance policy, views this, for when the possibility of charges arose last year a Mercedes spokesperson told Bloomberg: "Compliance is of central importance for Daimler," adding the company would discuss the case and future steps with Formula 1 stakeholders, other teams and the FIA, F1's governing body. That was before charges were even confirmed, so it will be intriguing to see how it reacts to the latest news.

In the final analysis, all this points to an extremely reckless custodian of a once-proud sport whose global following is measured in millions.

Regardless of the eventual outcome of this and all the legal issues Ecclestone and various associated parties - CVC included - are embroiled in, clearly the time has come for the FIA to step in and demand that CVC take decisive action before the Formula 1 brand, which is owned by the FIA and simply leased to Alpha Topco, is irretrievably tarnished. That is no illusion.

Ecclestone's Nurburgring plans

You have previously made financial concessions for the Nurburgring. Will you do so again to enable the next race in 2015 to go ahead?

BE: We have no contract with the Nurburgring for 2015. But what we hope to do goes a bit beyond concessions.

That sounds as though you could imagine taking over the circuit.

BE: We have made an offer, and now we are waiting to see whether it is accepted. We believe we are able to do more for the Nurburgring than the others.

How much would you be prepared to pay for the circuit?

BE: I am not allowed to comment as we signed a confidentiality agreement.

When do you hope to have a decision?

BE: I am hoping for clarity soon. A decision could be made within the next weeks.

Are there are other serious contenders?

BE: I believe so. There are one or two interested parties. But we will only pay what we believe the Nurburgring to be worth.

Why is [the circuit] important to you?

BE: It's a circuit people know. An old, traditional circuit.

If your offer is refused, could the future see only one Formula 1 race every alternate year in Germany, at Hockenheim?

BE: We would obviously speak to Hockenheim. We aim to ensure that in future Germany continues having an annual Formula 1 race.

Should the opposite situation come to pass, should Hockenheim be worried were you to get the go-ahead for the Nurburgring?

BE: No, we would continue to rotate between the two circuits on an annual basis. We are comfortable with the arrangement we have so far had in Germany.