Mystery Over Ex-Diageo CEO As F1 Role Stalls

The governance of Formula One motor racing is expected to face renewed scrutiny after it emerged that the former chief executive of Diageo had not taken up a boardroom role announced more than five months ago.

Sky News has learnt that Paul Walsh never became a director of the Formula One Group despite a statement late last year that he would do so by CVC Capital, the sport’s largest shareholder.

Mr Walsh, one of Britain’s most senior businessmen, had originally been in talks with CVC about becoming chairman of the sport’s parent company.

When those talks faltered amid suggestions that Mr Walsh and Bernie Ecclestone, F1's chief executive, had been unable to agree the parameters of the chairman's role, CVC invited Mr Walsh to join the board as a non-executive director.

In a statement last year, CVC announced that Mr Walsh and Luca di Montezemolo, the former Ferrari chairman, would join F1 as non-executive directors on January 1, while Mr Ecclestone would be reappointed to the board following the end of his bribery trial in Germany.

However, insiders confirmed on Tuesday that Mr Walsh had not taken up his position on the board and was not now expected to do so.

In recent days, following enquiries by Sky News relating to Mr Walsh’s absence from the board, the original announcement relating to his appointment was removed from CVC’s website.

It was unclear whether the removal of the announcement was connected to questions about the matter.

CVC declined to comment.

The unusual circumstances surrounding Mr Walsh come at an important time for F1, which has been facing fresh questions about the sport’s attractiveness to global television audiences and the financial pressures confronting its smaller teams.

The sport’s shareholders have also been engaged in on-off discussions about its future ownership, with a stock market flotation in Singapore now viewed by many insiders as a distant prospect.

F1 has nonetheless continued to be a lucrative investment for its owners, with shareholders in Delta Topco, F1's immediate parent, enjoying a $1bn (£585m) payout last year through a refinancing.

The payout was the biggest to F1's shareholders for two years, and augmented their already handsome returns on their investment in the world's most glamorous motorsport.

It also underlined the ability of F1 to continue throwing off cash even after a year when the sport's future leadership had been hit by uncertainty.

Bernie Ecclestone, F1's long-standing chief executive, was cleared after standing trial on bribery and corruption charges in Germany.

CVC Capital Partners, F1's biggest shareholder with a stake of just over 35%, bought into the sport in 2005, but it has been reduced its stake significantly during the last three years.

The group sold shares privately to investors including Blackrock, Norway's sovereign wealth fund and Waddell & Reed, a US fund manager, all of whom bought in at a valuation of around $9.2bn (£5.4bn).

For Mr Walsh, the news that he had not taken up his F1 directorship creates an unfortunate coincidence.

Sky News revealed earlier this year that he had been selected as the preferred candidate to take over the presidency of the CBI, the employers’ group.

That appointment was thrown into doubt when Mr Walsh signed a pro-Conservative letter from business leaders just weeks before the General Election, infuriating Labour and raising concerns among senior figures at the studiously neutral CBI.

Mr Walsh could not be reached for comment.