Ecclestone takes the stand in F1 payment case
- Article by: ROB HARRIS
- Associated Press
- November 6, 2013 - 8:15 AM
LONDON — Bernie Ecclestone defended himself Wednesday at the High Court in London against allegations he made a "corrupt" payment to protect his position running Formula One.
Former F1 shareholder Constantin Medien, a German media company, is suing Ecclestone and other defendants for up to $144 million, claiming F1 was undervalued at the time the BayernLB bank sold its stake.
Ecclestone is accused of making a "corrupt bargain" with BayernLB's Gerhard Gribkowsky, paying $44 million to ensure the bank's 47 percent stake was sold in 2005 to a buyer of Ecclestone's choosing, investment group CVC Capital Partners.
In the second week of the civil trial, the 83-year-old Ecclestone gave evidence for the first time in person on Wednesday and disputed giving conflicting statements after the payment emerged in 2011.
"I paid (Gribkowsky) because I said I was being 'shaken down,'" Ecclestone said, later adding: "I wasn't prepared to take the risk."
Claiming he never made any secret of the payment, Ecclestone said he gave Gribkowsky 10 million pounds (now $16 million) because he was threatened by the banker that his tax arrangements could be reported to the British authorities.
"He inferred he could and probably would, I'm not sure (he didn't)," Ecclestone said. "I have a massive tax inquiry at the moment."
No further detail of that inquiry was provided.
Ecclestone's legal team maintains that a "consultancy package" was paid to Gribkowsky, who has already been jailed in Germany for 8½ years for taking the payment. A German court is still deciding whether Ecclestone will stand trial on charges of bribery and incitement to breach of trust.
Under cross-examination in London, Ecclestone said he finds it easier to pay someone off when threatened rather than reporting blackmail attempts to the police.
Ecclestone said that would be the case if he was blackmailed over an affair.
Ecclestone, who spoke quietly and often banged the desk as he grew increasingly frustrated with questioning, claimed one of his daughters this week paid someone off "who made up some rubbish" to end the matter.
Ecclestone built his powerbase in F1 from the 1970s and helped to create the Formula One Constructors' Association that controlled the business side of the series, including selling the TV rights.
The British-based company later became known as Formula One Management.
CVC, having amassed a 63 percent stake of F1, has reduced its holding as other investors have come on board in recent years, although a planned flotation has stalled.
Constantin Medien is claiming it lost out due to the deal negotiated by Gribkowsky. Gribkowsky is a defendant in the case along with Ecclestone's lawyer, Stephen Mullens, and the Ecclestone family trust, Bambino Holdings.
Ecclestone and Bambino benefited by more than $1 billion from the sale of the 47 percent stake, according to Marshall, figures that gave F1 an enterprise value of more than $3 billion in "stark contrast" to the actual value of "just in excess" of $2 billion at the time of the sale in 2005.
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