A1GP: Australian police are investigating Gold Coast deal

By LJ Hutchins

CalendarMonday, February 8th, 2010

 
 

The five-year contract for A1GP to appear at Australia’s annual Gold Coast motorsports festival is now under investigation by that country’s police following a damning auditor’s report.

And Queensland police commissioner Bob Atkinson has told the Australian media that he is not ruling out asking London’s Metropolitan Police and the international law enforcement organisation Interpol to help his inquiry.

The police involvement comes after the regional government launched two high-level investigations into how public money had been spent in last October’s affair, which saw organisers pull the plug on A1GP with 48 hours to go after the series failed to fly its cars and equipment out to Queensland.

One, carried out by Auditor-General Glenn Poole, criticised inappropriate time scales, the due diligence process and its documentation as well as the lack of government oversight. He has asked the police to investigate how some aspects of the contract negotiations were handled.

The other report, carried out by former government director-general and business analyst David Williams, a member the event’s organising board from 1989 to 1996, analysed the governance and due diligence undertaken by the 2009 event organisers and made recommendations for the future.

It highlighted issues with the record-keeping of promoters International Management Group (IMG), an absence of termination clauses in the contract and the willingness of the event’s management company GCMEC to invest public money in an organisation with very few assets or resources. It also pointed to the lack of a contingency plan.

Additionally, it uncovered a report prepared by the New South Wales regional government which concluded that its three years of hosting A1GP races had seen declining attendance numbers, poor television ratings and few visitors from outside the area. For these reasons the contract was not renewed.

Despite this, tourism and international exposure were highlighted as prime reasons why Queensland should invest public money in A1GP in 2009.

In the aftermath of the report IMG, previously a partner of the government in GCMEC, is no longer involved in the Gold Coast motorsport festival following what is termed a “commercial settlement”.

The event, which went ahead without A1GP last year, will no longer include an international open-wheel category and will now focus on V8 supercars, held over three days instead of four and on a shortened circuit.

The release of the reports is not the only development in the A1GP saga over the past few days:

  • London’s High Court has finally ruled on the fate of the A1 Grand Prix Operations Ltd assets, including its cars. After the company went into liquidation Teixera argued that they were actually assets of its holding company. In reality they were in the hands of Delivered on Time, a freight company owed considerable sums for transporting them around the world. Now a judge has decided the administrators are the people with the strongest claim and they will thus be sold to raise funds for creditors. It has been suggested Teixeira himself may bid for the 25 Ferrari-powered cars in order to use them to relaunch the series.
  • The original Team USA franchise holder, which raced in the series between 2005 and 2008 before Andretti Autosport took the team over, has been awarded a judgment worth $4.5 million plus costs and interest against A1 Holdings Ltd and Tony Teixeira in a Virginia court. In dispute were the way the franchise agreement had been terminated plus a sum of $1.2 million in prize money that remained unpaid. These issues were resolved through a $4.5 million settlement but the franchise-holders took the matter to court when payments on this sum were not met. They have said they will now “aggressively” seek payment.
  • The series has pretty much acknowledged that the 2009/10 season is not going ahead with a statement from spokeswoman Ann Bradshaw to the Press Association. She said: “We’re not currently in a position to race in the near future, but this won’t be the death of the series, and organisers are already working towards the future.” So now you know.

Of course, we don’t even touch on the possibility here that Teixeira is in negotiations with Adrian Campos to finance the latter’s struggling F1 entry. If you want to catch up with that, click here.

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