German media firm seeks damages from Ecclestone for F1 sale

Bernie Ecclestone

Bernie Ecclestone

Bernie Ecclestone’s management of Formula 1 will face scrutiny next week when a German media firm seeks more than $100 million in damages over a deal that made CVC Capital Partners the motor sport’s main shareholder.

The civil case in London’s High Court is scheduled to open on Tuesday, a day after the diminutive Ecclestone turns 83. Despite his age, Ecclestone remains the hands-on chief executive of a business he has helped to turn into a global money-spinner over the last four decades.

German company Constantin Medien will argue that Ecclestone and three other defendants deliberately undervalued Formula 1 when private equity fund CVC bought into the business in 2005.

The legal fallout from the sale has already seen a former German banker jailed in Munich, complicated plans to float Formula 1 on the stock market and brought the Ecclestone succession issue into focus.

Germany’s BayernLB was one of the banks left in control of Formula 1 a decade ago after the collapse of Bavarian Leo Kirch’s media empire, which owned the rights. BayernLB sold a stake of 47 percent to private equity firm CVC for around $ 830 million in 2005.

As the successor company to a former Formula 1 shareholder, Constantin says thatit missed out on a share of the additional proceeds had the stake fetched a higher price.

The damages claim compares with a market capitalisation of around € 137 million ($189 million) for Constantin, a sports-focused media group based in southern Germany.

Ecclestone, who denies any wrongdoing, has been accused of favouring a sale to CVC because it wanted to keep him on as commercial chief of a sport that attracts hundreds of millions of TV viewers to the races it stages around the globe.

He told Reuters that he expected to be called as a witness in the damages case next month after he has attended the Indian Grand Prix this weekend and the race in Abu Dhabi on Nov. 3.

Ecclestone said it was business as usual despite the distraction of a case that could last for more than a month.

“I’m doing what I do, and that’s it. I’m committed to Formula 1,” he said.

Ecclestone, who has a personal fortune of more than £ 2 billion ($ 3.2 billion), has always said he has no plans to retire but has added he would step aside if convicted in Germany, where a court is expected to decide next year whether he should stand trial on bribery charges related to the sale to CVC.

Gerhard Gribkowsky, former chief risk officer at BayernLB, has been jailed for more than eight years for tax evasion and bribery after taking a $44 million payment from Ecclestone as part of the deal.

Ecclestone does not deny paying Gribkowsky but said he was the victim of extortion after the German threatened to make false claims over his tax affairs.

Ecclestone’s former lawyer Stephen Mullens, the Ecclestone family’s Bambino Holdings and Gribkowsky himself are the other defendants in the damages claim brought by Constantin in London. (Reuters)

Subbed by AJN.

  • Boycottthebull

    Actually they got Bernies assets way undervalued. Hes actually got over 7 billion so he could pay this 100 million suit with his credit card and get frequent flyer miles and still have a billion dollars a year to spend for the rest of his life. Bernie your in your mid 80’s time is your most valuable thing now just pay then off and not waste everyone’s time with endless hours in court especially your own. Time to fess up, Your not far off a death bed confession anyways.

  • Bec

    Even when it was sold above it value and to the highest bidder.

    Banksters really are the lowest of the low.

  • McLarenfan

    Greedy Bankers they always feel hard done too yet they claim they are worth their weight in gold, strange then they are always being found out for wrong doings. Who could trust a bunch of Bankers to tell the truth.

  • Dr. Azlan

    Bernie is da maestro.