Feb. 7 (Bloomberg) -- Bernie Ecclestone, accused in a New York court of paying a bribe to steer a Formula One racing stake to CVC Capital Partners Ltd., said he has never resided in the U.S. and isn’t subject to U.S. law.
A U.K. citizen living in London, the Formula One chief executive officer has visited the U.S. eight times since 2005, including trips to investigate the possibility of a racing event in New York or New Jersey and with his family to Las Vegas, he said in a court filing in Manhattan. In the U.S., he owns no property, leases no offices and employs nobody except lawyers defending him in the lawsuit, he said. Nor did any actions alleged in the lawsuit occur in the U.S., he said.
“The various events underlying the allegations in the complaint did not take place in New York or the United States, but in Europe and the Middle East,” Ecclestone said in an affidavit filed Jan. 31 in New York State Supreme Court.
Ecclestone, 82, transformed London-based F1 in three decades into the world’s most popular auto-racing series, attracting an average of 50 million TV views on a Sunday. The lawsuit by Bluewaters Communications Holdings LLC seeks $650 million for an alleged diversion of the sale of a stake in F1 to a lower bidder.
Bluewaters, a New York-based financial firm, alleged that Ecclestone paid a $44 million bribe to BayernLB director Gerhard Gribkowsky to steer to CVC the 47 percent stake previously owned by BayernLB, which kept Ecclestone on as head of F1. Bluewaters was the high bidder, willing to pay $1 billion at the time, the firm said in a Nov. 16 filing.
“We feel confident that New York is an appropriate forum, and we look forward to pressing ahead with the case,” Kent Yalowitz, a lawyer for Bluewaters at Arnold & Porter LLP, said in an e-mail.
Ecclestone said his payments, which moved from Swiss accounts to an Austrian account without assistance from New York banks as far as he knew, were unrelated to the sale to CVC. Rather, they were made to buy Gribkowsky’s silence after “insinuations” that he might tell U.K. tax authorities about certain activities of a family trust controlled by Ecclestone’s wife at the time, Ecclestone said in the filing.
“I was concerned that misinformation that he provided to the authorities might be taken seriously and might cause them to assess me to owe a tax bill of many hundreds of millions, if not billions of pounds that I believe I did not owe but which would have caused me to become bankrupt,” he said.
The Bluewaters lawsuit is related to a bribery case in Germany. Gribkowsky, who managed Munich-based BayernLB’s interest in F1 as the bank’s chief risk officer, said in court he was paid $44 million to direct the stake to London-based CVC and agreed to a sham contract under which Ecclestone received a kickback.
While public prosecutor Christoph Rodler said at a June trial that Ecclestone was a conspirator in the bribery, Ecclestone has said he doesn’t expect to be charged. Gribkowsky in July appealed a German court verdict sentencing him to more than eight years in prison.
In October, state-owned BayernLB sent a letter to Ecclestone’s lawyers demanding damages over the alleged bribery, Matthias Luecke, a bank spokesman, said at the time.
BayernLB acquired the F1 stake in 2002. Gribkowsky clashed with Ecclestone and sued him in London over corporate-governance rules changed to limit the lender’s influence. Ecclestone wanted to push BayernLB out and saw a chance when CVC showed interest, prosecutors have said.
The case is Bluewaters v. Ecclestone, 653965/2012, New York State Supreme Court, New York County (Manhattan).
To contact the reporter on this story: Linda Sandler in New York at firstname.lastname@example.org
To contact the editor responsible for this story: John Pickering at email@example.com