Ecclestone Charged in German Formula One Bribery Probe
By Karin Matussek - Jul 17, 2013 8:44 AM ET
Bernie Ecclestone was charged by German prosecutors over his role in a bribery scheme in the 2005 sale of a Bayerische Landesbank stake in Formula One racing to CVC Capital Partners Ltd.
The chief executive officer of Formula One was charged with bribery and inciting another person to commit breach of trust, Margarete Noetzel, the spokeswoman for the Munich courts, said in an e-mailed statement today. The indictment was filed in May and had to be translated before being served to Ecclestone and his lawyer.
Bernie Ecclestone is seen in this file photo as he arrives as witness for the trial against former CEO of Bayerische Landesbank and Formula One chairman Gerhard Gribkowsky on November 9, 2011 in Munich. Photographer: Alexandra Beier/Getty Images
Former BayernLB Chief Risk Officer Gerhard Gribkowsky, who was convicted over the matter last year and sentenced to 8 1/2 years in prison, had implicated Ecclestone. Gribkowsky, who managed the lender’s interest in Formula One, said in court he was paid $44 million to steer the sale of the bank’s 47 percent stake in the racing circuit to CVC, a U.K.-based buyout firm, and agreed to a sham contract under whichEcclestone received a kickback.
Sven Thomas and Norbert Scharf, Eccelstone’s lawyers, confirmed they received the indictment. The defense will respond “extensively” to the court and will raise the issue that Gribkowsky changed his testimony several times, they said in joint e-mailed statement.
The court will now determine whether the charges may go to trial. That decision will take at least until the middle of September, said Noetzel. Ecclestone was given until mid-August to respond to the charges, according to the statement.
Ecclestone, who has denied the allegations, told a Munich court in 2011 he was the victim of a sophisticated shakedown and bribed Gribkowsky because he feared the banker might tell U.K. tax authorities about a family trust controlled by his wife at the time.
CVC spokesman James Olley said the private equity group had no immediate comment about Ecclestone being indicted. The company isn’t part of the investigation and has said it didn’t know about any bribery payments in the deal.
BayernLB acquired the Formula One stake after Leo Kirch’s media group went bankrupt in 2002. Gribkowsky clashed with Ecclestone and sued him in London over corporate-governance rules changed to limit the lender’s influence. Ecclestone wanted to push BayernLB out and saw a chance when CVC showed interest, prosecutors have said.
The lender’s stake went for 840 million euros ($1.1 billion). CVC sold a $500 million stake in the auto-racing series to Waddell & Reed Financial Inc. (WDR) in early 2012. The sale valued Formula One at $9.1 billion and boosts Waddell & Reed’s holding to 20.9 percent, according to a CVC statement.
To contact the reporter on this story: Karin Matussek in Berlin at firstname.lastname@example.org
To contact the editor responsible for this story: Anthony Aarons at aaarons@Bloomberg.net.