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New Developments in Bernie Ecclestone Bribery Case

Jun 23 2014, 2:35am CDT | by , in News | Latest Sports News

New Developments in Bernie Ecclestone Bribery Case
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New Developments in Bernie Ecclestone Bribery Case

New evidence from German prosecutors has called into question whether Bernie Ecclestone paid a bribe to steer the sale of Formula One in 2006 to the private equity firm CVC.

Mr Ecclestone is currently on trial in Germany for paying the alleged bribe but close inspection of the 256-page indictment against him reveals a key hurdle to the prosecution’s case.

Mr Ecclestone admits paying Gerhard Gribkowsky, the former chief risk officer for German bank BayernLB which owned a 47.2% stake in F1′s parent company SLEC. However, Mr Ecclestone denies that the payment was a bribe and claims that Mr Gribkowsky threatened to make unfounded allegations about his tax affairs if the money was not paid.

According to the indictment, Mr Gribkowsky did not have the power to give the green light to the sale to CVC which raises the question of what would have been the point in Mr Ecclestone bribing him. The decision to sell was made by a majority of BayernLB board members and Mr Ecclestone has not been charged with bribing them.

BayernLB was paid $814 million for its stake which valued F1 at $2 billion and was double CVC’s initial offer. The indictment reveals that Mr Ecclestone knew Mr Gribkowsky could not get the BayernLB board to accept the lower offer. “The Accused knew that BayernLB was not ready to sell its shares for offers of between $400m and $500m, so the resulting sale price from an enterprise value of $1bn (as CVC brought into play) would not meet the expectations of the bank. The Accused knew that a sale at this price would fall through since he reckoned that even Dr Gribkowsky could not negotiate this price with BayernLB.”

The indictment adds that Mr Ecclestone was aware of this because “BayernLB did not agree to offers in the order of between $400m and $500m which were made between April and July 2005.”

According to the indictment, Mr Ecclestone encouraged CVC to pay more as he “reckoned from the start that BayernLB would not turn down an offer based on an enterprise value of $2bn for 100% of SLEC and the proportionate sale price derived from it for BayernLB’s shares.” He was proved to be right.


This article was written by Christian Sylt from Forbes and was legally licensed through the NewsCred publisher network.

 

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