Ecclestone 'Not A Reliable Witness,' But Has $140M Claim Dismissed By High Court
A London High Court judge has dismissed a $140M damages claim against F1 CEO Bernie Ecclestone and three other defendants from German media company Constantin Medien, according to Tom Cary of the London TELEGRAPH. However, Justice Newey said in his judgement that he found it "impossible" to regard Ecclestone "a reliable or truthful witness" and ruled that payments Ecclestone made to German banker Gerhard Gribkowsky "did constitute a bribe." Ecclestone and three other parties were accused of paying Gribkowsky, formerly the chief risk officer of Bavarian state-owned bank BayernLB, $44M in bribes to "undervalue its shares in the sport" when it was sold to present owners CVC Capital Partners eight years ago. Constantin Medien, a former shareholder in F1, claimed it "lost out on a huge commission" as a result of Ecclestone’s actions (TELEGRAPH, 2/20). In London, Kevin Eason reported the judge found that Ecclestone "did bribe Gribkowsky but not for the reason of undervaluing F1, as alleged by Constantin." The Constantin case "is the first in a series and will be seen as something of a test" for two other damages claims as a result of the sale of F1 in '06. BayernLB is claiming about $400M in damages in the High Court and a similar claim brought by American private equity group Bluewaters "is thought to be at the appeal stage after being thrown out by a New York court." Ecclestone "will still face a criminal trial in Germany in April." This "is the case on which Ecclestone’s career will turn." At 83, he "wants to remain in charge of the sport he virtually created over four decades," but the prosecutors in Munich "have been determined to bring him to trial." If found guilty, Ecclestone faces a maximum jail sentence of 10 years, although it is "unlikely he would serve a sentence of that length" (LONDON TIMES, 2/20).
CLOSING ARGUMENTS: In London, Paul Weaver reported Ecclestone "had waited two months for the verdict" following the civil case in London at the end of last year. Newey said, "No loss to Constantin has been shown to have been caused by the corrupt arrangement with Dr. Gribkowsky. That fact is fatal to the claim." Constantin "are expected to appeal the decision" (GUARDIAN, 2/20). Newey: "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. Even ... 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." BBC Chief Sports Correspondent Dan Roan said, "This will be a bitter-sweet victory for Bernie Ecclestone -- his reputation called into question, his integrity called into question too by a High Court judge" (BBC, 2/20).
F1 RESPONSE: F1 has said that Ecclestone "remains in day-to-day charge of running the business," which has an annual turnover of around $1.5B, but he has "stepped down as a director pending the outcome of the German trial." Ecclestone "will also face tighter supervision" from a F1 board that includes prominent businessmen including Nestle Chair Peter Brabeck and CVC co-Founder Donald Mackenzie. The uncertainty over Ecclestone's future "makes it hard to revisit stalled efforts to launch an initial public offering" of a sport that attracts hundreds of millions of TV viewers to its series of grands prix held around the world (REUTERS, 2/20).