independent

Thursday 17 April 2014

Bernie Ecclestone to face bribery charges in Germany

Formula One Chief Executive Bernie Ecclestone at the High Court in central London
Formula One Chief Executive Bernie Ecclestone

Bernie Ecclestone is expected to face formal criminal charges in Germany over bribery allegations that will threaten his position as the most powerful man in motor sport, according to reports.

Prosecutors in Munich will announce today that they are to launch criminal proceedings against the Formula One chief executive over $44 million (£27 million) paid to banker Gerhard Gribkowsky, who was involved in the sport’s sale in 2005, a Sky News report said.

Ecclestone, whose control of a sport he has governed for nearly four decades would be seriously damaged by any criminal proceedings, faced a $140 million damages case in the High Court last year over the sale of Formula One. It was brought against him by by a German media firm, Constantin Medien.

Constantin Medien claimed in the High Court it lost out on a large commission as a result of BayernLB’s undervaluation of its shares following a payment to Gribkowsky, the company's chief risk officer.

According to the reports, Ecclestone's trial will begin on April 23, and he will step down from the board of the CVC until the trial has concluded. However, he will remain in charge of Formula One's day-to-day management.

Ecclestone denies any wrongdoing. He does not deny paying Gribkowsky but claims he was “shaken down” by the banker, who allegedly threatened to make false claims that would have resulted in damaging investigations by UK tax authorities about his relationship with Bambino, potentially triggering a UK tax investigation and cost him billions of pounds. In 2012 Gribkowsky was jailed for more than eight years for offences including tax evasion and bribery.

A judgement on the High Court case is expected by Mr Justice Newey this month.

Red Bull team boss Christian Horner, said yesterday that Ecclestone is the "only guy" to run Formula One, despite his legal difficulties.

"Bernie is absolutely the best and only guy to do what he does, to take Formula One to the global reach that the sport has achieved, introducing races in Russia this year, going back to the Austrian Grand Prix," Horner said.

"It's a massive calendar that he's pulled together [for 2014]… it's in all our interests that he's around as long as possible."

CVC currently owns a 35.5 per cent stake in Formula One, after it sold down its holding from 63 per cent last year.

Plans for a stock market flotation in Singapore have been postponed until the legal actions against Ecclestone have been resolved, CVC's co-founder Donald Mackenzie said last year.

Mackenzie added that if Ecclestone were to be found guilty of breaking the law, the Formula One supremo could be sacked. "If it is proven that Mr Ecclestone has done anything that is criminally wrong, we would fire him," Mackenzie said in November.

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