Ecclestone Legal Woes Mount as U.K. Judge Says He Paid BribeKit Chellel and Alex Duff
Formula One Chief Executive Officer Bernie Ecclestone’s legal problems mounted as a U.K. judge said he made a “corrupt” payment to facilitate the sale of the racing series and called him neither “reliable or truthful.”
The comments came in a case won by Ecclestone, with Judge Guy Newey dismissing a suit seeking $140 million over bribery allegations that have plagued the 83-year-old for almost a decade. Newey, however, becomes the second judge to rule Ecclestone paid a bribe during the 2005 sale, months before he faces a criminal trial in Germany.
The bribery scandal relates to the 2005 sale of Bayerische Landesbank’s controlling stake to CVC Capital Partners Ltd. German prosecutors say Ecclestone paid a BayernLB official $44 million to ensure that CVC was the final buyer.
“It’s not really advantageous to Ecclestone, he’s still got a lot to fight,” said Tom Bower, who wrote a biography of Ecclestone. “The judge found he paid a bribe. He will have a huge battle in Germany.”
Ecclestone said in an interview that he wanted the German trial to start so he can “clear up all the nonsense,” and that it wouldn’t interfere with his running of Formula One.
The bribery scandal threatens Ecclestone’s control of the international motor-racing championship he has owned or run since 1995. He gave up his seat on the racing series’ board last month after a Munich court said he must stand trial in April on the bribery charges.
“The payments were a bribe,” Newey said. They were made to ensure the stake was sold “to a buyer acceptable to Mr. Ecclestone.”
In today’s case, Ecclestone was sued by German media company Constantin Medien AG, which said the bribe deflated the value of its stake in F-1. While Newey said Ecclestone made the illegal payment, the bribe had no effect on the value of the company.
“I’m a bit better off financially than I could have been, that’s what it was all about,” Ecclestone said. Constantin are “ambulance chasers, they sue people all the time,” he said.
Ecclestone testified during the trial that he was a victim as BayernLB’s chief risk officer, Gerhard Gribkowsky, threatened to tell U.K. tax officials about a family trust if he didn’t pay the money.
In a separate statement, Ecclestone said the bribery allegations weren’t properly tested by Newey as Gribkowsky never gave evidence in the U.K. Ecclestone has consistently denied that he paid a bribe.
Slightly Better Off
“While this victory may mean that Mr. Ecclestone is slightly better off than he might have been, as he puts it, the potential repercussions and damage to his reputation may cost him substantially in the future,” said Nick Rowles-Davies, a lawyer and consultant at Vannin Capital Ltd., which invests in legal claims.
Her Majesty’s Revenue & Customs is now looking at the trust, Ecclestone said today in an interview.
“We’re having a chat with” the Inland Revenue, he said. “They’re looking at things, they’re doing their job.” He declined to give any further details.
Ecclestone said he has “had nothing to do with” the fund. Bambino holds assets worth $5 billion, based on its 8.5 percent stake in the motor racing series and cash flows since 1997, according to the Bloomberg Billionaires Index.
Constantin also sued lawyer Stephen Mullens, Gribkowsky and the family trust, which the judge said wasn’t involved in the corrupt deal.
The case is Constantin Medien AG v. Bernard Ecclestone, case no. 11-02586, High Court of Justice, Chancery Division.