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The curious timing of the announcement of the case against Bernie Ecclestone

NEWS STORY
21/01/2014

Last week the world of Formula One was taken by surprise by the announcement that Bernie Ecclestone will be put on trial in Munich in April on bribery charges.

In typically blunt fashion, Ecclestone revealed the news to German publication Handelsblatt and although he stepped down from the board of F1's parent company Delta Topco as a result, it hasn't affected his influence over it one bit as Pitpass has revealed. Ecclestone was charged with bribery in May last year and the prosecutors said that a decision about whether to proceed with a trial would be made early this year so it shouldn't have come as a surprise. There was good reason why it did.

The charges relate to a $44m payment made by Ecclestone and his Bambino family trust between 2006 and 2007 to Gerhard Gribkowsky, former chief risk officer of German bank BayernLB. It owned a 47.2% stake in F1 and prosecutors believe that Ecclestone paid the $44m so that Gribkowsky would agree to selling the shares to private equity firm CVC which had agreed to retain him as boss of the sport.

In June 2012 German prosecutors sentenced Gribkowsky to eight and a half years in prison for receiving a bribe and this was the catalyst for their charges against Ecclestone. They weren't the only ones who had a gripe.

German media rights firm Constantin Medien had an agreement with BayernLB entitling it to 10% of the proceeds if the F1 stake sold for more than $1.1bn but as CVC paid $814m it didn't get a penny. Constantin claims that Gribkowsky was paid $44m to sell to CVC and if it had not bought F1 other bidders offering more money would have come forward.

Constantin took legal action in London against Ecclestone, Gribkowsky, Bambino and its former legal adviser Stephen Mullens and judgement in that High Court case is due in the coming weeks. The question of whether money was paid to sell F1 to CVC was at the heart of this civil case and it was widely reported that the German prosecutors were closely following the proceedings.

In fact, when they announced that they would make a decision about the trial in early 2014 it was understood they had done this so that they could take into consideration the result of the civil case. After all, although the jurisdictions are different, the question of whether Ecclestone paid a bribe so that F1 would be sold to CVC is also at the heart of the prosecutors' argument. The evidence from the UK case would be used in a trial in Germany and although the Munich court would not have to follow the verdict from London it could help its case.

If Ecclestone loses the UK case then this would obviously play into the hands of the prosecutors in Germany and it would have increased the pressure on him if they had announced the trial after the verdict. However, by announcing the trial before the verdict the prosecutors have put themselves in a strange situation. If Ecclestone loses it doesn't change much for them as it simply vindicates their decision to proceed with a trial but if he wins it could call into question whether it is worth them bringing him to trial. In contrast, if they had made the decision about the trial after the UK verdict they could have decided not to proceed if it goes in Ecclestone's favour. So why didn't they wait?

The prosecutors aren't the only ones who seem to have jumped the gun. In the closing days of the Constantin case BayernLB announced that it will sue Ecclestone in London for damages as a result of the alleged bribe leading to CVC buying its stake rather than a higher bidder. It is essentially the same argument as the one put forward by Constantin so if it loses its case then it dramatically reduces BayernLB's chances of success.

It is a view shared by Ecclestone as Pitpass revealed earlier this month. He said that the risk for BayernLB is he "might insist" that the bank's case goes ahead even if he wins the one from Constantin. As BayernLB has said it will sue Ecclestone in London the judge would have to take into consideration the Constantin verdict and if it goes in Ecclestone's favour it could cost the bank dearly in court. This brings us to the question of what was the point in BayernLB announcing before the Constantin verdict that it intends to sue Ecclestone.

He says that the German prosecutors' announced their decision to proceed with a trial because they didn't want to wait any longer for the Constantin verdict. However this wouldn't apply to BayernLB which made its announcement before the Constantin trial had even finished.

It makes one wonder whether the German prosecutors and BayernLB made their announcements in a bid to influence the judgement in the Constantin case by showing that they believe Ecclestone is in the wrong. However, there is absolutely no proof that the judge in the Constantin case would be influenced by this. Likewise, there is absolutely no proof that BayernLB or the prosecutors have attempted to influence his decision.

Accordingly we are still left with the question of the curious timing. It has a real consequence which will hit home when the Constantin verdict is given. If Ecclestone loses the case it would add weight to the arguments of BayernLB and the prosecutors. In turn this would pile even more pressure on F1's boss. However, if he wins then it would raise real questions about whether there is any point in putting him on trial as the prosecutors could have more to lose than to gain. They have a way out but that is a story for another day.

Christian Sylt

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READERS COMMENTS

 

1. Posted by yagijd, 21/01/2014 22:38

"After watching Bernie having trouble with swinging doors I am sure he could claim he didn't remember anything. The old Washington two step would probably work."

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2. Posted by rsp123, 21/01/2014 18:10

""...there is absolutely no proof that BayernLB or the prosecutors have attempted to influence his decision..."

I wonder what a little bit of proof would be.

The confusion between proof and EVIDENCE is depressingly common."

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3. Posted by F1 at Indy, 21/01/2014 15:48

"wow!"

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