30 October 2013
Ecclestone accused of ‘corrupt bargain’
F1 supremo Bernie Ecclestone has been accused of conspiring to make a 'corrupt bargain' to ensure the sale of F1 rights to current owner CVC.
The opening day of proceedings in the civil action against Bernie Ecclestone and three other defendants accused of bribery in the sale of F1 rights has seen the F1 ringmaster cited for making a 'corrupt bargain' that resulted in Constantin Medien losing millions of dollars.
The case, being heard at the High Court in London, is the latest in a series of hearings resulting from the sale of rights to asset management group CVC back in 2006, and has been brought by Constantin Medien which, having had an interest in F1 stakeholder Bayern LB at the time, believes that the undervaluing of the stock – and monies paid to cover it up – saw it denied the price it deserved.
The media company is seeking more than $100m in damages from Ecclestone, his family Bambino trust, former lawyer Stephen Mullins and banker Gerhard Gribkowsky. Although the latter has already been jailed in his native Germany accused of accepting a bribe, however, Judge Guy Newey has told the prosecution that it cannot use the German indictment as evidence.
Ecclestone is not scheduled to appear in court until next week, and the trial began with the lead counsel for Constantin Medien criticising the deal struck between the 83-year old and Gribkowsky. Outlining his client's case, Philip Marshall claimed that Ecclestone paid Gribkowsky $44m to ensure that BayernLB's 47 per cent stake would be valued well below its expected price, allowing CVC – which had promised to keep Ecclestone at the head of the sport – to complete its acquisition. It was also suggested that Ecclestone and Bambino stood to make $1bn from the sale.
"A corrupt bargain was made between Mr Gribkowsky and Mr Ecclestone to facilitate a sale of the Formula One Group to a purchaser chosen by Mr Ecclestone in return for remuneration [for Gribkowsky] and a position in F1 going forward [for Ecclestone]," Marshall alleged.
"We see the transaction as being significantly weighted for the benefit of Mr Ecclestone and Bambino, and significantly to the detriment of BayernLB and those who had an interest [in its stake]. This arrangement effectively dealt with a serious threat from BayernLB to Mr Ecclestone's control of the Formula One Group.”
Ecclestone does not deny making payments to Gribkowsky, but insists that he was being blackmailed, with the German threatening to reveal details of his tax affairs. Lawyers representing the octogenarian insist that Constantin Medien's 'claim lacks any merit'.
“In short, this is an artificial, manufactured, complaint," they alleged in written statements presented to the court prior to the hearing, "The claim fails on each of its elements. There was no conspiracy, there was no intent to injure Constantin. Constantin has suffered no loss."
In the wake of Gribkowsky's conviction, Ecclestone is waiting to hear whether he will face bribery charges in Germany, and it was revealed on Tuesday [29 October] that prosecutors in Switzerland are considering an investigation into whether he broke Swiss law. The Briton naturally denies any wrongdoing, but faces losing his long-held control of F1 should any of the courts find against him.
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