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Why legal proceedings in the UK are irrelevant to Gribkowsky

NEWS STORY
28/12/2011

It may be Christmas but there is one story in Formula One which won't stop for the holidays and that is the case against the sport's former chairman Gerhard Gribkowsky. He is on trial in Munich for the criminal offence of allegedly receiving a £27.5m bribe from F1's boss Bernie Ecclestone and his Bambino family trust in connection with the sale of the sport to its current owner, private equity firm CVC, in 2006. He is also facing proceedings in the UK which aren't criminal and it is this which has been in the news recently.

Before even talking about the latest reports it is essential to be completely clear about both the difference between the two legal cases and the connection they share. Some media outlets have failed to explain this which is far from sensible. One of the cases is criminal, whilst the other is not, so the last thing which should be done is to confuse them.

The case in Germany is purely against Gribkowsky and he is accused of receiving £27.5m from Ecclestone and Bambino in return for agreeing to sell F1 to CVC. In addition to being F1's chairman, Gribkowsky was also chief risk officer of German bank BayernLB, which owned a 47.2% stake in F1. He was responsible for making the decision of selling the stake and the indictment against him charges him with receiving the money in return for agreeing to sell to CVC.

Prosecutors came up with a number of reasons explaining why Ecclestone would have specifically wanted CVC to buy F1 but, as Pitpass has reported, they don't seem to hold water.

The UK case claims that F1 was in fact worth far more than the total of £1.1bn ($1.7bn) which CVC paid. So because Gribkowsky allegedly received a bribe for agreeing to sell F1 to CVC the sport ended up being sold for less than it was worth. Three other parties have been accused in this case alongside Gribkowsky. They are: Ecclestone and Bambino, because they allegedly paid the money to get Gribkowsky to sell to CVC, and the trust's former lawyer Stephen Mullens, who was consulted about the payment.

The UK case has been brought by former F1 owner German media firm Constantin Medien (previously known as EM.TV) which sold its stake in the sport to BayernLB for just €8.5m in 2003. It did this on condition that when BayernLB sold the stake Constantin would get a 10% share of any proceeds above £628m ($1bn). Since BayernLB owned a 47.2% stake in F1 it received £527m ($839m) from CVC and as this was below the $1bn threshold, Constantin did not get its 10% share.

Constantin claims that it lost out because CVC paid far less than F1 was worth and since a bribe was allegedly paid to get BayernLB to sell to CVC, anyone involved with it is to blame for the loss.

Pitpass' business editor Christian Sylt has written extensively in UK newspapers about the many reasons why Constantin's case appears to have no merit, not least of which being the fact that the German courts acknowledge that CVC was the highest of many bidders. This alone seems to make a mockery of the idea that F1 was worth far more than it was sold for.

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