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Ecclestone deal “corrupt” says judge over F1 private equity investment

21 Feb 2014

F1 head Bernie Ecclestone will not have to pay an $85m damages claim surrounding the acquisition of a stake in the motorsport company by private equity firm CVC.

German media group Constantin Medien had claimed that F1 was undervalued, but Justice Guy Newey found that the company had suffered no financial loss.

However, he ruled that Ecclestone did bribe former BayernLB banker Gerhard Gribkowsky, labelling the agreement “corrupt”.  He also said that Ecclestone had proved neither “reliable or truthful” in giving evidence.

BayernLB inherited control of F1 after a $988m loan to defunct German media group Kirch, which then owned the company, went sour.

The $44m bribe paid by Ecclestone was said to be in return for him being allowed to stay on as F1 head. He previously said the payment was made to keep Gribkowsky from telling UK authorities about tax issues relating to his trust fund Bambino Holdings, describing it as a “shakedown”. Gribkowsky was jailed for more than eight years in 2012.

The BBC reported Justice Newey’s ruling, “The payments were a bribe. They were made because Mr Ecclestone had entered into a corrupt agreement with Dr Gribkowsky on May 2005 under which Dr Gribkowsky was to be rewarded for facilitating the sale of BLB’s shares in the F1 Group to a buyer acceptable to Mr Ecclestone.

“Mr Ecclestone’s aim was to be rid of the banks. He was strongly averse to their involvement in the F1 Group and was keen that their shares should be transferred to someone more congenial to him.

“Making allowances for the lapse of time and Mr Ecclestone’s age, I am afraid that I find it impossible to regard him as a reliable or truthful witness.”

Earlier this month CVC was said to have been approached by global cable company Liberty Global and US media group Discovery Communications with a bid to acquire a 49 per cent stake in F1. Last year the firm paid itself an $865m dividend following a series of lucrative media deals.

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