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Jailed banker: the plot thickens and the reporting worsens

NEWS STORY
10/02/2011

Surprise surprise, there is yet another report in the German media about Gerhard Gribkowsky, the former chairman of SLEC, F1's rights-holding company, who is currently in prison in Munich under suspicion of receiving a bribe for undervaluing the shares in the business when it was sold. Surprise surprise, the report links the bribe to F1's boss Bernie Ecclestone and, surprise surprise, the report is complete and utter nonsense.

To recap, when Gribkowsky was SLEC's chairman he represented German bank BayernLB which owned a 46.6% stake in the company. Two other banks, JP Morgan and Lehman Brothers, owned around 14.2% each with the remaining 25% in the hands of Bambino Holdings, the investment vehicle of the Ecclestone family trust.

On 25 November 2005 Bayern agreed to sell its shares in SLEC to F1's current majority owner, the private equity firm CVC, and, according to Barbara Stockinger, spokeswoman for the prosecutors, the shares "had been sold without being properly evaluated." Stockinger added that "the suspect in turn received $50m in payments disguised via two consultancy agreements."

The theory is that Gribkowsky deliberately undervalued the shares and received $50m for doing so. Receiving a bribe is just as illegal as giving one yet, despite this, no one has been arrested for paying the money. It is now one month and four days since Gribkowsky was arrested so the fact that the payer of the alleged bribe has not yet been arrested causes Pitpass' business editor Chris Sylt to smell a rat when it comes to the theory above. But that's not all.

The latest reports in the German media speculate that CVC paid $837m for Bayern's share but Bayern actually only got $770m as $40m was received by Ecclestone with $27m going to Bambino. This theory is utterly laughable.

It has been over five years since CVC agreed to buy Bayern's SLEC shares so there is no doubt that if the bank had not been paid the amount that it expected to receive it would have filed a lawsuit for breach of contract against CVC. This has not happened and in the UK there is a six year time-frame for suing for breach of contract so Bayern is running out of time if it ever wanted to take action for this.

In short, there is absolutely no evidence that Bayern was not paid the amount it expected to receive from CVC. Indeed, the bank has admitted that it gained from the sale as it reported a valuation yield of €328m in its 2006 results and stated that the F1 shares "decisively contributed to the positive result." Presumably, if Bayern hadn't been paid the amount it expected to receive from CVC it would have stated this in the results along with the fact that the bank was taking legal action to recover the missing funds.

This means that CVC paid Bayern the amount that the bank expected to receive. Accordingly it is simply impossible that CVC paid $837m for Bayern's share but only $770m went to the bank. This debunks yet another spurious theory which attempts to link Ecclestone to paying a bribe for undervaluing the shares. Uninformed sceptics could foolishly claim that Sylt is biased since he is one of the only journalists worldwide who regularly meets Ecclestone for lunch. However, not only would this accusation be utterly false, it would be a refusal to accept that which is directly in front of one's nose. If you think about it hard enough there really isn't even any need for evidence to debunk the theory above, it is common sense.

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