UK court to rule on Ecclestone case in 2014
14 December, 2013
A British judge will rule next year on a $100 million damages claim brought against Formula 1 boss Bernie Ecclestone over his involvement in the 2005 sale of a stake in the globally renowned motor racing business.
German company Constantin Medien alleges that Ecclestone, 83, was part of a “corrupt bargain” with a German banker to undervalue Formula 1 and favour the sale of a controlling stake to private equity fund CVC – which had agreed to keep Ecclestone on as chief executive of the business.
Constantin stood to gain a share of the proceeds had the stake been sold for more than $1 billion.
The seven-week trial ended on Friday. Judge Guy Newey said he was reserving judgment on the case and did not set a date for delivering his verdict. He is expected to take several weeks to review the evidence, a common practise in complex civil cases.
CVC paid about $830 million for the 47 percent stake in F1 held by Germany’s BayernLB, one of a group of banks who were left with control of the sport after the collapse of media company Kirch.
The decision in the London High Court will not be the end of the legal fallout: BayernLB said this week that it planned to file its own $400 million damages claim against Ecclestone, a case which the Formula 1 boss has said that he will fight.
The legal issues threaten Ecclestone’s long grip on the company he built up over three decades and have made it hard to revive stalled plans for an initial public offering of Formula One shares in Singapore.
Philip Marshall, counsel for Constantin, argued on Friday that Ecclestone was motivated by a wish to secure his position as head of Formula 1 and “get rid of the banks’ involvement”.
Lawyers for BayernLB will have access to documents gathered by Constantin after the two sides reached agreement on Friday.
A Munich court last year jailed Gerhard Gribkowsky, BayernLB’s former chief risk officer, for 8 ½ years for tax evasion and bribery for taking a $44 million payment from Ecclestone and his family trust after the deal.
Ecclestone says that he paid Gribkowsky 10 million pounds but said it was because the German was threatening to make damaging claims about his tax status. He denies any connection between the payment and the sale of the stake to CVC.
Giving evidence in this case last month, Ecclestone described the payment as an “insurance policy” to protect himself against Gribkowsky.
The Munich court will decide next year whether to order Ecclestone to stand trial on bribery charges.
CVC, which remains the largest shareholder in F1, with a stake of around 35 percent, said it will fire Ecclestone if he is found guilty of wrongdoing. (Reuters)
Subbed by AJN.