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Ecclestone could face trial over bribery, F1 floatation again postponed

By Berthold Bouman

By now it has become clear the recent postponement of the Formula One floatation on the Singapore Stock Exchange has everything to do with Bernie Ecclestone’s involvement in the bribery of former BayernLB banker Gerhard Gribkowsky, who recently has been sentenced to eight and a half years in prison for several crimes, including bribery.

Bernie Ecclestone

During the court case German State Prosecutor Christoph Rodler already hinted Ecclestone might have to stand trial for his part in the affair and at the time said, “Ecclestone was not a victim of blackmail, but a fellow participant in bribery.” Ecclestone’s financial affairs are already under investigation by the British tax authorities, the HRMC, but the 81-year old Formula One boss still claims he paid the German banker because he was blackmailed.

Gribkowsky, a former BayernLB risk officer, received £28million from Ecclestone during the sale of the German bank’s stake in Formula One to CVC Capital Partners in 2005. CVC has always maintained they had nothing to do with the bribery and have been silent ever since the case became world news.

As said, now Ecclestone himself could face trial, because the Briton has in the past mockingly and publicly labelled Gribkowsky as a ‘civil servant’, and the German prosecutor has now interpreted those words in such a way, that he concluded Ecclestone therefore was ‘knowingly bribing a public official (civil servant)’.

The sting is always in the tail and this time it seems Ecclestone’s joke mocking Gribkowsky could also be the start of his own demise. Perhaps Ecclestone suspected something was going on, because he didn’t show up for the German Grand Prix, three weeks after Gribkowsky’s sentence was announced.

Which brings us to the floatation again, and although Ecclestone always has denied speculations that the Gribkowsky case has had its impact on the floatation, CVC, now Formula One’s biggest shareholder, has until today failed to make the so-called Initial Public Offering (or IPO, basically a prospectus with prices and a minimum number of shares one has to buy, expected profits, and without a doubt a colourful story about why one should buy F1 shares). Initially it had to be published in June, but at the time CVC mentioned ‘volatile markets and continuing problems in the eurozone’ had postponed publication of the IPO until October.

Ecclestone stated at the time, “We haven’t got a date set yet, but with all the problems in the eurozone and the markets, we will be waiting until things have settled a little. Who would want to try and list now. This year, for sure, we are going to go through to market. I don’t think there’s a big rush, but we plan to get it done by the end of the year.”

But earlier this week Ecclestone again announced the floatation would be postponed, again the economic situation would be the culprit, as Ecclestone said, “The float won’t happen this year, but next year it will if the markets change.” To the UK Telegraph he said, “No IPOs have gone through, only [football club] Manchester United. I was surprised that they let it go through at the price.”

Others blame the new Concorde Agreement as it hasn’t yet been signed by all Formula One teams. The Concorde Agreement is an agreement between the Formula One teams, the governing body the FIA, and the commercial rights holder CVC, which among other things rules on the distribution of television revenues and prize monies until 2020.

It is also understood teams want more control over the future technical regulations, although Ecclestone recently said signing is just a formality, “We are just talking to the lawyers — ‘why have you used this word, that word’. Typical lawyers but everything’s fine. Commercially it’s done,” he said.

If Ecclestone has to stand trial for bribery, it will have an impact on the current commercial value of Formula One, whether he likes it or not, and he will need a whole army of lawyers, and a whole lot more money than he paid Gribkowsky, or — to use his own words — he will indeed also be ‘done’ …


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