Home | News | Features | Drivers | Teams | Seasons | Galleries | Circuits | Forum | Shop
It is now two years since former banker Gerhard Gribkowsky was arrested in Germany for allegedly taking a £27.5m bribe from Formula One's boss Bernie Ecclestone in return for steering the sale of the sport to current owner, the private equity firm CVC. Ecclestone has admitted being behind the payment to Gribkowsky but he has not been charged with bribery despite widespread speculation that he would. As Pitpass recently reported as every day passes it looks less likely that Ecclestone will be brought before a court in Germany. However, as our business editor Christian Sylt reveals in the Telegraph today, Ecclestone is indeed going to court about a related matter and he says he is positively looking forward to it.
The court case in question has been brought by Constantin Medien, a former part owner of F1, which claims that Ecclestone and Gribkowsky conspired to undervalue F1 when it was sold to CVC in 2006 for £1bn ($1.7bn).
Ecclestone told Sylt "I'm prepared to give evidence in court and there will be a few others [who do so] as well." He added "sure, I am looking forward to it... I wish they would bring it forward. It's going to be amusing."
Gribkowsky was chief risk officer of German bank BayernLB which sold a 47.2% stake in F1's parent company SLEC Holdings to CVC. Following the sale Gribkowsky received £27.5m from Ecclestone and his family trust and in June last year the former banker was sentenced to eight and a half years in prison for corruption, breach of trust and tax evasion.
Prosecutors in Germany ruled that the money was paid to Gribkowsky so that he would wave through the sale to CVC which was allegedly Ecclestone's preferred choice as it had agreed to retain him as F1's boss. Ecclestone denies it was a bribe and says that in fact Gribkowsky threatened to tip off the UK's Inland Revenue with false details about his tax affairs if the £27.5m was not paid.
Ecclestone has not been charged with any wrongdoing in Germany but Constantin Medien has filed a civil suit against him in the UK. It claims it lost out because BayernLB's stake alone was worth £1.7bn ($2.8bn) but Gribkowsky did not investigate other bidders since he had received a bribe to sell to CVC. The trial is expected to take up to five weeks to be heard and Constantin's representative, Keith Oliver of Peters & Peters, declined to comment.
Constantin owned a 16.7% stake in F1 which had a balance sheet value of £169m. However, this was sold to BayernLB in 2003 for just £7m (€8.5m). In return for Constantin agreeing to sell its stake for a low valuation, the bank committed to a profit share agreement. If BayernLB had sold its F1 stake for more than £620m ($1bn) then Constantin was due to get around 10% of the amount above that threshold. CVC only paid £520m ($839m) for the stake so Constantin did not get a payout. It claims that it lost £106m ($171m) because the stake was undervalued.
Ecclestone denies that F1 was undervalued and says that the lawsuit is being driven by Constantin shareholder and board member Dieter Hahn. "This is a case where he is saying because of the actions that allegedly took place he lost money. Because the shares were sold cheap. His problem is people from the bank said the shares weren't sold cheap... CVC gave a very good price for the shares."
During the trial of Gribkowsky Kurt Faltlhauser, who headed BayernLB's administrative board from July 2002 until July 2005, said "the price we were offered by CVC was surprisingly high and it came as a great relief." Former BayernLB management board member Dieter Burgmer added that "BayernLB's management board regarded the net proceeds from the sale of the Formula One stake to CVC as very attractive." Reflecting this, BayernLB announced a valuation yield of £272m (€328m) in its 2006 results and stated that the sale of the F1 shares "decisively contributed to the positive result."
Ecclestone says that he has been approached with an offer to settle the case but it has been rebuffed. "All this is about Dieter Hahn finding a way to get money. It is as simple as that... He had some intermediary, who is a friend of ours, to talk to me about 'you know you should settle, you don't want to go to court'. I'm not settling. The judge will settle the case."
Until the payment to Gribkowsky came to light neither BayernLB nor Constantin publicly expressed any concern over the amount paid for the shares and Ecclestone says "it's taken people five years to think those shares were sold cheap. Why wait four or five years and then decide?" Constantin will soon have to answer that question in court.
Copyright © Pitpass 2002 - 2013. All rights reserved.
About | Advertise | Contact | Copyright | Privacy & Security | RSS