Formula One Management told the F1 Organizing Committee of South Jeolla Province to pay a penalty for not holding an F1 race this year.
The specific amount of the penalty has not been disclosed. According to the contract between both sides, any one failing to comply with it is to pay a sanction fee equivalent to two years. The sanction fee is estimated at US$43 million per year. The committee said, however, that its penalty is much less than US$86 million. “Our contract was a slave contract for the benefit of the FOM,” it added, continuing, “Nevertheless, we will not sue the FOM because the FOM will be put to shame if the contract terms are revealed.”
Still, it is also said that the FOM will not file a suit against the committee, because the committee only has 50 million won in capital, and the FOM can expect little from litigation. Another possibility is that the committee will pay a small penalty to the FOM after political negotiations.
South Jeolla Province has held four F1 races since 2010, incurring losses of hundreds of billions of won. The municipal bonds for circuit construction amount to 290 billion won (US$264 million), and accumulated deficits total 190 billion won (US$173 million).