Ecclestone Made ‘Corrupt’ Deal to Sell F1 Stake, Lawyer SaysKit Chellel
Bernie Ecclestone, the chief executive officer of Formula One, was accused on the first day of a London trial of making a “corrupt bargain” to ensure the controlling stake in the sport’s parent company was sold to his preferred bidder.
German media company Constantin Medien AG is suing Ecclestone over allegations that he paid bribes to German banker Gerhard Gribkowsky in 2005 when F1 was sold to private equity firm CVC Capital Partners Ltd. He wanted to ensure he remained as chief executive of Formula One, which was in doubt at the time, said Philip Marshall, a lawyer for Constantin.
Ecclestone, 83, has already been charged in Germany over the scandal and the U.K. trial starts on the same day Swiss prosecutors said they are investigating whether any laws were broken in that country. Gribkowsky was convicted in Munich of receiving a bribe last year and sentenced to 8 ½ years in prison.
Ecclestone gave about $44 million to Gribkowsky, who managed Bayerische Landesbank’s controlling stake in F1, then concealed the payments using offshore companies in Mauritius and the British Virgin Islands and “bogus documents,” Marshall, told the court, citing prosecution documents from Germany.
Ecclestone’s lawyers at Herbert Smith Frehills LLP in London declined to comment, according to a spokesman for the firm. He has said that he made the payments after Gribkowsky threatened to tell U.K. tax officials about a family trust controlled by Ecclestone’s wife at the time.
Constantin says it lost as much as $171 million because the 2005 deal undervalued its stake in the sport. The sale was made without any marketing, independent valuation or competing bids, Marshall said.
Ecclestone and CVC co-founder Donald Mackenzie are due to testify at the trial in November.
The case is: Constantin Medien AG v. Bernard Ecclestone, case no. 11-02586, High Court of Justice, Chancery Division.