Upheaval at Morgan Grenfell Private Equity

GRAHAM HUTTON, the man who oversaw Morgan Grenfell Private Equity's disastrous moves in Formula 1 has been dumped as chief executive of the company by its parent Deutsche Bank. Hutton follows Scott Lanphere out of the company. Morgan Grenfell is currently sitting on a $300m loss on an investment invested in EM.TV, which owns a large slice of SLEC, the F1 holding company, but EM.TV shares are lower than they have ever been, fluctuating around the 2 Euro mark ($1.7). The company also has around $100m sunk in Arrows but has to date been unable to sell that shareholding.

It seems that MGPE may eventually be sold off by the bank but for the moment it has come under the control of Sir Robert Smith, deputy chairman of Deustche Asset Management. One of his priorities will be to find a solution to the F1 problems but the only way out would probably involve writing off the investment. The news could be both good news and bad news for Tom Walkinshaw. He is almost certain to lose his backing from Eurobet, which is owned by MGPE, but he may find himself in a position to buy back the shares in his company for considerably less than what they are worth.

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