by Terry Lovell
A few days later Marshall flew to Biggin Hill from Shoreham-by-Sea, Sussex, and, as he taxied to park, a car drew up, from which a gofer emerged to apologise that Ecclestone had been delayed by business and couldn’t be there in person. It was suggested that Marshall left the keys and logbook in the plane to be driven to Ecclestone’s office at his plush car showrooms, James Spencer Ltd, in Bexleyheath. Once there, Marshall was kept waiting for about 30 minutes before being shown into Ecclestone’s office, where he was told that the plane had been checked over and was OK.
Ecclestone then put a proposal to Marshall: would he take some cars in part exchange? No, Marshall replied firmly, the price of £3500 had been agreed. Ignoring Marshall’s reply, Ecclestone continued: ‘Come with me, I’ve got some cars to show you.’ Marshall followed Ecclestone to a row of lock-up garages at the rear of the showroom where he was invited to cast an eye over several sports cars, including a 3500 Maserati. Marshall liked the look of none of them. ‘One side of the Maserati looked as if it had been damaged and repaired.’ He remained unswayed by Ecclestone’s offer and continued to insist that he be paid the agreed sum.
Back in his office, Ecclestone, clearly annoyed, threw a banker’s draft on to his desk, followed by a sales contract for Marshall to sign. The deal done, Marshall asked Ecclestone for a lift to the local railway station for his return journey to Sussex. To his astonishment, Ecclestone refused. He then asked if he could use a phone to call a taxi. Ecclestone issued the same response. When Marshall asked the reason for his refusal, Ecclestone replied testily: ‘Because you’ve been bloody awkward.’ Marshall was left to make his way to the station without Ecclestone’s assistance.
If Marshall had been treated to an almost comical display of Ecclestone’s churlishness, he was soon to appreciate the shrewd efficiency of his business style. The next day, when he informed the management at Shoreham airport that he would no longer require a hangar for the Piper, an air-control staff member casually commented that he hadn’t remained long at Biggin Hill, adding that the plane had taken off 15 minutes after landing. Marshall then realised why Ecclestone hadn’t met him as arranged. While he was being driven from Biggin Hill, another car was arriving with a potential buyer. And he was kept waiting in Ecclestone’s office until it was reported back to Ecclestone that its sale had been agreed. If there had been a hitch, Ecclestone would have doubtless told Marshall that he was no longer interested in its purchase. As it was, Ecclestone had sold on the plane, doubtless at a handsome profit, before he had even bought it. ‘It was a neat, shrewd deal,’ said Marshall. ‘At the end of which I was stuck in a public phone box trying to get back home.’ Ecclestone was also quick to denounce the story of this alleged deal, but added: ‘That’s another thing I don’t remember anything about [but] it’s no good me saying anything because I don’t remember Chris Marshall.’
Although by the end of the sixties, Ecclestone, then in his fortieth year, was well into the millionaire class, it was a status not easily confirmed by the annual returns of his various companies at that time. Newspaper and magazine articles charting Ecclestone’s rise to riches suggest it was made possible through considerable wealth generated by his successful business ventures and their subsequent disposal. For example, it has been consistently reported that he built up Compton & Ecclestone into the third-largest operation of its kind in the country, which made him a wealthy man, before its sale to John Croker in September 1959, and which, just two months later, Croker, through sudden financial misfortune, was forced to sell to the two car dealers, White and O’Connor, who had introduced him to Ecclestone.
But, apart from Harcourt Motor Cycles, Compton & Ecclestone was the only motorcycle business that Ecclestone owned, and then one of modest profits. Albert Shucksmith, president of the Motor Cycle Retail Association, who had been in the motorcycle retail business for 40 years, said the biggest distributors of motorcycles in the late fifties and sixties were Kings of Oxford, Pride and Clarke, Claude Rye and Comerford. The biggest dealers in second-hand motorbikes were thought to be Grays, based in Tewkesbury, Gloucestershire, with 18 branches. Compton & Ecclestone? ‘No, I’ve never heard of them,’ said Shucksmith.
Under its new owners, White and O’Connor, Compton & Ecclestone was to prove no more successful, but its demise led to Ecclestone indulging in sharp practice to deprive the Inland Revenue of almost £10,000. The circumstances were created by the company’s trading slump, which caused the owners to put up its property and assets as collateral in order to secure overdraft facilities from Lloyds Bank, which, by January 1960, had reached £25,000. That month Ecclestone, fully aware of the value of the property and its assets, paid off the overdraft in return for the debenture. Less than three months later he appointed a Receiver to close the company down. The Receiver proceeded to freeze the company’s assets and to collect money owing to the company totalling £6134. He also discovered that Compton & Ecclestone owed the Inland Revenue, who were preferential creditors, the sum of £9700. At this point Ecclestone embarked on a rather unorthodox strategy in breach of company law.
On 1 June 1961 he discharged the Receiver and instructed him to return all monies and assets to the company. In doing so, he also gave the Receiver a statement indemnifying him against all liabilities. The next day, White and O’Connor, the two sole directors of Compton & Ecclestone, agreed to assign to Ecclestone, in return for the £25,000 now owed to him, the leasehold of the property, their possession of motorcycles and scooters, and the £6134 owing to the company. Ecclestone subsequently disposed of the property and its assets for an unknown sum but for certainly more than £25,000. The Inland Revenue did not receive its due of £9700. The business of Compton & Ecclestone came to an end just one month later. Two of the company’s creditors, St Margaret’s Trust Ltd and BSA Motor Cycles Ltd, petitioned for the company to be wound up, which took place on 24 July. By which time, of course, the cupboard was bare.
Ecclestone was finally brought to book ten years later when, in December 1971, in the Chancery Division of the High Court, the Inland Revenue sued him and the Receiver for the recovery of the £9700, with interest and costs. Justice Goff, who found against Ecclestone and the Receiver, described the ‘machinery’ of Ecclestone’s dealings with the Receiver and the two directors as ‘altogether extraordinary’. Ecclestone declined to appear in court to give an account of his actions. Commented Mr Justice Goff: ‘…the documents themselves and the admissions made out of court cry out for an explanation … and [Mr Ecclestone] does not condescend to give one.’ Ecclestone strongly refutes the charge of business trickery. It had not been his plan. Had he acted on the advice of tax lawyers? ‘Not tax lawyers. Just an accountant, probably.’
It has also been claimed in newspaper articles that some of Ecclestone’s early wealth had come from what was described as his ‘highly prestigious’2 car auction company, Mid-Week Auctions, and its sale for a substantial sum to British Car Auctions, the biggest company of its kind in the country, and which in August 1983, with Toyota, went to the rescue of a near-insolvent Lotus with a £6.69-million finance package after Colin Chapman’s company was badly hit by the collapse of the fraudulent De Lorean gull-winged sports car project. In fact, this ‘highly prestigious’ company, which Ecclestone set up in May 1969 on a plot of land he bought in Manor Road, Erith, Kent, was in business for little more than a year, ceasing to trade in June 1970. Nor was it purchased by British Car Auctions.
Looking for an auction site south of the River Thames, the company rented the premises from Ecclestone for a period of about three months before establishing an auction at Brands Hatch. Its then chairman, David Wickins, said: ‘We ended up in a legal argument about the state of the premises because they kept falling down. They were tumble-down buildings and one of them fell down in a storm.’ There was some doubt in Wickins’s mind as to whether Ecclestone had obtained regulatory permission for auctions to be held on the property ‘but I wouldn’t swear to that. But we certainly didn’t buy his company.
’ His criticism of the structural soundness of the buildings was deemed by Ecclestone to be ‘all bollocks. That was the best car auction Wickins ever had, and you can tell him I said so.’
Another tenant whose premises were unable to withstand too much stormy weather was Belmont Mechanical Instruments Ltd, a light-engineering company which Ecclestone’s company and the owner of the Brabham team, Motor Racing Developments, began using in 1971 to machine its Formula One and production-car wheels. A sudden afternoon gale brought down a 14-inch thick wall, which sent the desk and chair of a director of the company, Alan Smith, plummeting through the floor. Fortunately, he was not sitting in it at the time, but when he complained to Ecclestone of the damage caused, his landlord, he said, jokingly replied: ‘So what’s wrong? You’re still alive.’ Miraculously, no one was hurt. Smith, concerned that talking about the incident might upset Ecclestone, added that the next day his landlord had builders at work repairing the damage ‘and he replaced damaged office furniture and equipment’. Ecclestone said of the incident: ‘Yeah, but that’s the way it goes. We had gales the other day, and didn’t walls come down and roofs come off houses?’
His wealth was further increased, according to newspaper claims, by the ‘disposal of his businesses, which made him very wealthy indeed’.3 Ecclestone, in fact, didn’t dispose of any of his businesses any more than he ran his businesses down in 1973 in protest at the introduction of VAT, as claimed in a book on successful entrepreneurs..4 One broadsheet newspaper article stated that at some point he disposed completely, in a single deal, of his garage business but was unable to remember whether it took place in the mid-sixties or mid-seventies, a curious lapse, as the newspaper pointed out, for someone so precise about figures when they come with dollar or percentage signs attached. It might have been due to the fact that he did not dispose of it at all. The extent of his garage business was James Spencer (Bexleyheath) Ltd, which throughout its history recorded a small turnover and losses and, by February 1978, had ceased to trade.
The only company that appeared to reflect the level of profits able to support the lavish lifestyle to which Ecclestone had become accustomed was his hire-purchase company, Arvin Securities, formed in 1961 and based at the James Spencer car showroom premises in Bexleyheath. By 1969 – the earliest records available for the company – it had cash in the bank of £192,000, but even then it appears to have been a cash injection by Ecclestone himself from an unidentified source. The money was withdrawn 12 months later. This was around the time when Ecclestone first began talking to Ron Tauranac about his interest in the Brabham team and the money may have been used for the purchase of Motor Racing Developments Ltd for £100,000 (worth in 2002 about £860,000).
One of Ecclestone’s employees at the time – ‘the man’s a bleedin’ genius’ – was Ron Smith, described by former associates as a ‘minder’ but by Smith himself as Ecclestone’s ‘right-hand man’. Aged 73 when interviewed, a failing memory prevented him from recalling precise details of his work but his duties included repossessing cars purchased with loans from Ecclestone’s finance company and ‘taking cash’ to different people.
There remains Ecclestone’s property interests, the most probable source of much of his early wealth. On the evidence of trading figures, it does not appear to have been generated, though, through Pentbridge Properties or Pentbridge Services, which were set up in July 1971 and July 1989 respectively. Pentbridge Properties seemed to do little more than handle Ecclestone’s personal properties, the biggest of which deals took place a month after it was formed. Pentbridge Properties went to an offshore tax haven, Rochelle Ltd, based in Guernsey, to borrow £95,000 for the purchase of 26 acres of woodland at the rear of Ecclestone’s home in Farnborough Park, a part of which had been the subject of an unsuccessful planning application to the local council for housing development. It was an unusual source of funding. Rochelle Ltd’s UK address was given as 25 Harley Street, London, the same as Pentbridge Properties, as well as that of its auditors. By 1980, when Rochelle Ltd went into voluntary liquidation, the loan had still to be repaid.
In 1984 the land was sold by Pentbridge Properties to Centaur Property, a company based in Woolwich, south London, and set up two years earlier by furniture retailer Alan Fernback, a neighbour of Ecclestone’s. Pentbridge loaned Centaur Property half of the purchase price of £200,000. Surprisingly, Fernback denied knowing Ecclestone, or having had any dealings with Pentbridge Properties. Yet, in 1978, a property company called Linemoor Ltd was formed with Fernback and Ecclestone as joint directors. Its only trading activity was the loan of £24,900 to Pentbridge Properties in January 1980, which was repaid that July, before Linemoor Ltd was dissolved in 1984. Fernback declined to respond to questions about the company.
The source of Ecclestone’s early wealth, in fact, came through shrewd property speculation, which began when he was barely out of his teens and at a time when London, still recovering from the wartime Blitz and when planning regulations were far less stringent, offered rich pickings for property speculators. It was a natural hunting ground for someone of his shrewdness, energy and hunger for money. One of his first deals, he recalls, took place around 1950 – he would have been about 20 – when he bought some industrial premises in Greenwich, south London, the only detail he was able to remember. More memorable, probably because of his passion for motorcycle racing at that time, was his attempt to buy Brands Hatch a year earlier. He had agreed with Joe Francis, a former TT motorcyclist, successful motorcycle dealer with several premises in Kent and principal shareholder in the company which owned the circuit, to buy it for £46,000 (worth about £897,000 in 2002), but the deal fell through at the last minute. All the same, that a 19-year-old was in a position to raise such considerable capital offers a measure of his substance and commercial precocity.
According to Ecclestone’s former partner, Frederick Compton, typical of his risk-taking opportunism was an approach in the early fifties to buy the premises of the Strood Motor Company, based in Strood, Kent, and the biggest retail distributors of the British Motor Corporation, the leading UK car manufacturer of its day. Although he didn’t have the capital to complete, he was able to raise the money for a deposit to secure first option, which he then sold on at a considerable profit to University Motors, a now defunct company specialising in sports cars, who completed the purchase. ‘It was a major property on a plum location,’ said Compton, in admiration of Ecclestone’s shrewdness, ‘but it took a lot of nerve to pull it off.’ His nose for a good profit was just as sharp in the acquisition of Jennings, an old-fashioned draper’s shop with a huge frontage in Bexleyheath High Street, which he split up into units to make another considerable killing.
Fellow car dealer Jimmy Oliver, from whom Ecclestone bought a number of cars, believed that his young colleague had accumulated considerable wealth by the time he was 24. It was based on a comment made over lunch at the exclusive Poole Yacht Club in Dorset in 1954, after Oliver had quietly pointed out some distinguished fellow diners, including Sir Bernard and Lady Docker, and a couple of millionaire businessmen. Ecclestone, distinctly unimpressed, said Oliver, replied: ‘I suppose if you’ve only got a hundred grand, you’d be regarded as a pauper here.’ Whatever the precise state of his wealth at this time, it did not apparently meet with the all-round approval of his family. ‘He was thought of as a bit of a “wide boy”,’ said a relative. ‘Money meant a lot to him. Different members of the family said he was a sharp cookie.’
Ecclestone declined to confirm that his early property activities, none of which went through company books – ‘It would be me personally doing those deals. I didn’t know about companies probably then’ – created the foundation of the early wealth, which allowed him to buy the Brabham team. In a style familiar when he chooses not to answer an unwelcome question, he brushed it away with a joke. ‘No, I probably stole it. It was probably the Great Train Robbery.’ This was a mocking reference to a consistently recycled newspaper rumour that he was involved i
n the Great Train Robbery, which took place in England in August 1963, when a London-to-Glasgow mail train was robbed of £2.6 million.
It had been planned, it was claimed, by ‘an underworld mastermind’, which, in more fertile imaginations, implicated Ecclestone – all on the evidence of a brief meeting he had with Roy ‘The Weasel’ James, a one-time Formula Three driver and the gang member who drove the getaway car. From Parkhurst Prison on the Isle of Wight he wrote a letter dated 6 September 1970 to former world champion Graham Hill, then with Brabham, expressing a desire to return to racing. Hill arranged for James to meet Ecclestone shortly after his release three years later – only to be told that, after 12 years in prison, he had little chance of succeeding. On learning that James was a qualified silversmith, and to help him on his way, Ecclestone commissioned him to make a trophy. It was an act of charity that fired the rumour mill to create a sinister link. Ecclestone’s attitude, then and now, was one of total indifference. If people want to think he’s Al Capone, so what? What does he care what people think?
Many years later there was another former ‘prisoner’ Ecclestone was able to help, although a gesture of compassion on this occasion was hardly necessary. In the early nineties it was a regular habit of Ecclestone’s to spend an hour or two on a Saturday morning with close friends in a café in London’s Mayfair. On this particular occasion Max Mosley joined the number and ordered a cup of coffee. Some five minutes later a waitress returned to the table with a plate weighed down with eggs, sausages, bacon, tomatoes and beans. Mosley explained that he had ordered only a coffee. The waitress said, well, he could have the breakfast anyway. No, said Mosley, he really didn’t want it. Yes, said the waitress, he really should. And, not to worry, he wouldn’t have to pay for it. Further protestations that he really didn’t want it were answered by the waitress smiling amiably and walking away.