Former F1 boss Bernie Ecclestone is facing a fresh trial over alleged bribery
Formula One's former chief executive Bernie Ecclestone is set to face a fresh trial over bribery and corruption allegations, relating to the 2006 sale of the motor racing business to private equity firm CVC Capital Partners.
London's High Court announced yesterday that Ecclestone will face trial on 1 October 2019, reviving a case which Ecclestone will have hoped was concluded when he paid £60m to a Munich court in 2014.
Bluewaters Communications Holdings, a firm which invests in telecoms and media assets, claims that its bid for a controlling stake in Formula One before the CVC sale was derailed by a corrupt agreement reached between Ecclestone and banker Gerhard Gribkowsky.
Gribkowsky was responsible for the sale of the controlling stake owned by German bank Bayerische Landesbank (BLB). He was jailed following a previous Formula One bribery case in 2012.
“Our client Bluewaters is pleased that the judge has now set a date for the trial in London, which presents an opportunity to show how Mr Ecclestone's secret payments to Gerhard Gribkowsky blocked our client’s bid for Formula One," said Simon Bushell of Signature Litigation, the law firm representing Bluewaters.
The history of the case
In early 2005, BLB was looking to sell its stake in Formula One – allegedly due to its objections to Ecclestone's management style.
Bluewaters was introduced as a potential buyer, and claims that – during negotiations – Ecclestone sought assurances that he would be kept as chief executive, which he was not given.
The firm further alleges that when he did not receive these assurances, Ecclestone took steps to ensure that BLB’s shares in Speed (the vehicle which owned 75 per cent of Formula One, which itself was owned by BLB, JP Morgan and Lehman) were sold not to Bluewaters but to a company he approved of – in the end, CVC Capital Partners.
"The timing is key," said Bushell. "Mid-way through Bluewaters' negotiations with BLB, in May 2005, we know that Dr Gribkowsky started discussions with his accountant in Austria in anticipation of receiving large payments which needed to be handled very discreetly."
In 2012, Gribkowsky confessed to accepting secret payments arranged by Ecclestone and a vehicle owned by the Ecclestone family trust, Bambino Holdings. The banker was sentenced to eight and a half years in prison for accepting bribes.
Ecclestone's £60m German settlement
Ecclestone initially denied all knowledge of the secret payments, but later claimed that Gribkowsky was trying to "shake him down" by threatening to reveal tax avoidance schemes that Ecclestone had with Bambino.
In a criminal bribery case brought by German prosecutors in 2014, the case was terminated when Ecclestone agreed to pay a £60m penalty to the German treasury.
The payment of the sum before the trial concluded meant there was no ruling on Ecclestone's guilt or innocence.
Thrown out in New York and London
More cases were brought in both New York and London. German media rights firm Constantin Medien brought a $100m claim against Ecclestone in London in 2013, saying he undervalued Formula One in the $2bn sale to CVC and colluded with Gribkowsky to retain control of the sport.
If BLB's shares had been sold for over a certain amount, Constantin would have been entitled to a payment itself due to an agreement the two parties had.
But the High Court dismissed Constantin's claim, saying that the payments made to Gribkowsky were a bribe but that no loss to Constantin had been proved.
The Court of Appeal refused to allow a challenge to that decision.
Bluewaters has also previously tried to bring a case in New York, but this was thrown out in 2014 by Supreme Court judge Eileen Bransten. She said the court did not have jurisdiction to decide on the case, and it was better heard in either Germany or England.
A whole host of litigation
In 2016, Ecclestone filed a case against BLB in the High Court asking it to rule that he had no liability to the bank. BLB countersued, and sought damages from Ecclestone saying that his corrupt agreement with Gribkowsky had meant its stake was undervalued in the sale to CVC.
The case was settled out of court for an undisclosed sum.