Update: re German Bribery Banker Ecclestone Etc

[Macmoish]

Telegraph

Payments by F1's Ecclestone were a bribe, judge rules

Multi-million pound payments made by Formula 1 boss Bernie Ecclestone relating to the sale of the sport in 2005 amount to a "bribe" according to a High Court judge.

By Jonathan Russell, Assistant editor10:17PM GMT 20 Dec 2011

The statement by Mr Justice Vos came as a default judgement was handed down against Gerhard Gribkowsky, the German investment banker accused of accepting £27m in alleged bribes from Mr Ecclestone.

Mr Ecclestone has not denied making the payments but said they were part of a subtle "shakedown" by Mr Gribkowsky and did not amount to a bribe.
When this was put to Justice Vos on Tuesday he replied: "Isn't that a bribe"?
The civil proceedings in London are being conducted in parallel with a criminal case against Mr Gribkowsky in Germany. In both cases the banker is accused of receiving bribes to influence the sale of Formula 1 to CVC Partners.
In the German case Mr Gribkowsky is the sole party accused.

In London Mr Gribkowsky is being pursued alongside Mr Ecclestone, his lawyer Stephen Mullens and Bambino Holdings, the Ecclestone family trust.
German media group Constantin Medien is suing the four for damages relating to what it alleges was a material undervaluation of Formula 1. Damages have yet to be assessed but they could be more than $175m (£112m).
Default judgment was handed down against Mr Gribkowsky on Tuesday as he has not responded to the writ issued by Constantin. The other defendants are understood to have filed defences.
Keith Oliver, partner of Peters & Peters, acting for Constantin Medien said: "Constantin welcomes this important procedural step and will be pressing on with the determination of damages against Gribkowsky and in the continuing proceedings against Ecclestone and Mullens, and Bambino Holdings."

www.telegraph.co.uk/finance/financial-crime/8969048/Payments-by-F1s-Ecclestone-were-a-bribe-judge-rules.html

[RoryTheRanger]

Surely Eccles should be put away for this as well??

[Macmoish]

Telegraph

Bernie Ecclestone admits £27m secret payments

Formula 1 chief Bernie Ecclestone helped conceal multi-million pound payments at the heart of bribery allegations gripping English and German courts.

Mr Ecclestone admits $44m (£27m) was paid by him and his family trust to German investment banker Gerhard Gribkowsky but denies it was a bribe. Photo: EPA
By Jonathan Russell, Assistant editor9:33PM GMT 23 Dec 2011

According to his own defence documents Mr Ecclestone sent secret payments via third parties in Switzerland in order to disguise their source.
Mr Ecclestone admits $44m (£27m) was paid by him and his family trust to German investment banker Gerhard Gribkowsky but denies it was a bribe. He claims it was the result of a subtle "shakedown" on him by Mr Gribkowsky who was threatening to take unfounded allegations about him to the tax authorities.

Mr Gribkowsky is facing criminal charges relating to the payments in Germany. In London Mr Ecclestone, his family trust Bambino Holdings, his lawyer Stephen Mullens together with Mr Gribkowsky are being sued in the civil courts.
The parties are accused by former owner of F1, Constantin Medien, of materially undervaluing the motorsport when it was sold to CVC Partners in 2005, in part through the payment of bribes.
As revealed by The Daily Telegraph Mr Gribkowsky, who masterminded the sale of F1 to CVC, had a default judgement handed down against him earlier this week.

Mr Ecclestone denies any unlawful conduct. His defence states: "There was no conspiracy, no fraud, no combination and no unlawful conduct".
The F1 boss says he made the multi-million pound payment to Mr Gribkowsky after being threatened by the banker.
The document states: "Mr Ecclestone did arrange for payments to be made to Mr Gribkowsky. These payments were made in response to insinuations from Mr Gribkowsky that he would create difficulties with the UK tax authorities with regard to the status and efficacy of the Bambino trust arrangements…. Mr Ecclestone chose to pay Mr Gribkowksy off rather than face the aggravation, delay and potential risks (however unqualified) that Mr Gribkowsky threatened."
According to Mr Ecclestone's defence the payments were channelled through third party companies with the help of an intermediary, Swiss financial advisor Andre Favre.
Mr Favre is described as someone who "provided services to Mr Ecclestone from time to time."
There is no suggestion that Mr Favre was engaged in any wrongdoing.
As well as admitting the $44m payments Mr Ecclestone details how he was paid a 5pc commission from the sale of F1 to CVC.
Mr Ecclestone contends the payment from BayernLB, the bank which owned a stake in F1 and employed Mr Gribkowsky, was a brokerage fee.
It was in consideration for Mr Ecclestone's "highly co-operative" work on the transaction and was "more than justified in all the circumstances", according to his defence.
Bambino Holdings was also paid significant sums on the sale of F1. The $25m payment was described in the legal papers as repayment of a loan.
Mr Ecclestone claims there is no link between the sale of F1, payments made to him and his family trust from BayernLB and the subsequent payments to Mr Gribkowsky.
He points out the payment to Mr Gribkowsky was made some time after the sale of F1 concluded.
Mr Ecclestone was not available for comment yesterday. Amid the allegations of bribery and corruption swirling around the F1 paddock as result of the legal challenges it is easy to forget the central issue at stake in the London case is on valuation.
German media giant Constantin Medien claims the sport was sold at something like half its real price as result of the conspiracy between the defendants causing it to lose out on a profit sharing agreement.
In his defence Mr Ecclestone denies this saying the purchase price was "attractive". He says the net proceeds of $765m was the highest price BayernLB could have achieved for its stake. Mr Ecclestone claims the viability of F1 was under threat making the sale problematic. The CVC offer valued F1 at $2.1bn including debt.

www.telegraph.co.uk/finance/8975977/Bernie-Ecclestone-admits-27m-secret-payments.html

[Lonegunmen]

Men with his sort of money, Rory, do not go to jail. Expect the carpet to be lifted a few inches and the broom to come out.

[gramps]

He's a nasty, crooked little scum bag and deserves to have the book thrown at him.

[Macmoish]

He's an 80+ old man...
Anyway this particular court case, he wasn't actually on trial.

[Lonegunmen]

No, but charges could be brought in relation to his part in the affair. However, I doubt it. men with his sort of push never get prosecuted.

[Macmoish]

To return ...

FINANCIAL TIMES

Banker in F1 case talks with prosecutors

By James Wilson in Frankfurt

The German banker at the centre of bribery charges involving Formula One motor racing is holding talks with prosecutors that could pave the way for a conclusion of the case.

Gerhard Gribkowsky is accused of receiving bribes from Bernie Ecclestone, F1 chief executive, when the banker helped put together a deal to sell it in 2005.

The former chief risk officer of BayernLB, the German bank, has been on trial in Munich since last year and is also charged with breach of trust and tax evasion.

German prosecutors ­contend that Mr Gribkowsky received $44m from Mr Ecclestone and from Bambino, a trust linked to Mr Ecclestone’s former wife, when BayernLB sold its F1 stake to CVC Capital Partners, a private equity group.

Closing Friday arguments in the trial were postponed to allow time for further talks between Mr Gribkowsky’s lawyers and state prosecutors, the judge in the case revealed.

A court spokesman said that the talks were likely to be for Mr Gribkowsky to decide whether to admit involvement.

This could influence a sentence handed down by the court if he is convicted or pleads guilty, according to the spokesman.

The banker, who has been in custody for 17 months, has so far not answered investigators’ questions and has not spoken in court in his defence.

Mr Ecclestone, who has been investigated as a ­suspect by German authorities but who has not been charged with any offence, has appeared as a witness at Mr Gribkowsky’s trial.

Over two days of evidence Mr Ecclestone said that he paid the banker after feeling he was “being shaken down” over his UK tax affairs.

The F1 chief has for many years been the dominant figure in the sport. His involvement in the German court case has already been outlined to potential F1 investors in the prospectus for a $3bn initial public offering of the business.

Those IPO plans have been delayed because of financial market turmoil.

CVC, which remains the majority owner of F1, has said that it had no knowledge of any payments made by Mr Ecclestone to Mr Gribkowsky at the time of its deal to buy the company.

Mr Ecclestone also received a commission of more than $41m from ­BayernLB as part of the deal.

Mr Gribkowsky’s trial is scheduled to resume next week, although a court statement said that it was not known how long the talks between prosecutors and defence lawyers would ­continue.

Mr Gribkowsky left BayernLB in 2008.

The state-owned bank inherited F1 after the collapse of the Kirch media group, a BayernLB customer, which previously owned the sport.

www.ft.com/cms/s/0/83a5aaf6-b6eb-11e1-8c96-00144feabdc0.html#axzz1xw4lMKEm

[Macmoish]

TELEGRAPH - June 20, 2012

German banker admits he took bribe from Bernie Ecclestone for the 2006 sale of Formula 1

A German banker in charge of selling Formula 1 has admitted in court that he took bribes from Bernie Ecclestone in exchange for selling the motor racing group to private equity firm CVC.

By Helia Ebrahimi Christian Sylt, Senior City Correspondent, and Christian Sylt

9:12PM BST 20 Jun 2012

The money, which was originally described as a “consultancy fee”, amounted to $44m (27m) and was paid by Mr Ecclestone and Bambino, a family trust linked to Mr Ecclestone’s former wife.


In his first courtroom statement during his long-running corruption trial, banker Gerhard Gribkowsky admitted the accusations against him were “essentially true” and claimed that the payments had been to ensure the sale went according to Mr Ecclestone’s plans rather than in exchange for consultancy work. Mr Gribkowsky said that he had denied being bribed in the past because he was concerned about the future of F1, which has been preparing for a $9bn (£5.7bn) Singapore flotation later this year.

The surprise confession means that Mr Gribkowsky now faces between seven and nine years in prison on charges of corrupt payments as well as breach of trust and tax evasion.

Last night, Mr Eccelstone denied the payments had been bribes and said he was considering whether to take legal action against Mr Gribkowsky. He told the Daily Telegraph that Mr Gribkowsky “was bound to say” what he did because “he was going to get twelve years, but he got seven”.

Last November, Mr Ecclestone appeared as a witness in the Munich trial of Mr Gribkowsky and admitted he had made the payments to him. However, he claimed the payments were a result of being blackmailed by the former banker, who was “shaking him down” and threatening to go the Inland Revenue in the UK with allegations of tax evasion that could have exceeded £2bn, At the time, Mr Ecclestone said: “I paid him to keep calm and not to do silly things.”



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In 2006 Mr Gribkowsky was chief risk officer for the state-owned German bank BayernLB, which had inherited 47.2pc of F1 because it was a creditor of the Kirch media empire, F1’s holding company, which had collapsed in 2002. His position made him responsible for the sale of F1. The prosecution claim the banker sold the F1 stake to CVC - Mr Ecclestone’s choice - at an undervalued price of €840m rather than choosing the right buyer with better potential return for the German bank. They allege this was done in exchange for the $44m bribe, which also resulted in a $41.4m payment to Mr Ecclestone from BayernLB.

Mr Ecclestone has denied this was a kickback to allow him to pay the alleged bribe to Mr Gribkowsky without it all coming from his own pocket. Mr Ecclestone claims the money was paid partly a 5pc commission fee and partly a loan repayment his family trust had made to F1.

Last night, Mr Ecclestone said: “I didn’t tell him that he must sell to CVC... How can I say to him that he must do something?”

“The only thing I said [to Gribkowsky] is if I sell the shares I want commission. Whoever you sell to I don’t care who you sell to.”

In court Mr Gribkowsky said Mr Ecclestone had originally asked him for a $100m commission for his role in helping BayernLB sell to CVC. Mr Gribkowsky told the court: “From today’s standpoint I should have strictly turned down that request."

“I felt I deserved some form of recognition for a result I had achieved by years of very hard work. When the little man made the offer, he hit the right button”

In his statement, Mr Gribkowsky also said: “It took me a long time to come to terms with what I have done and to admit even to myself: Yes, it was bribery and yes, I should have paid tax... Still today I have troubles accepting this as a reality.”

Last week CVC sold a further 14.4pc stake to US asset manager Waddel & Reed in a $500m deal. The sale boosts Waddel's holding to 20.9pc and reduces CVC's stake to just 35pc. It is the second stake sale in the last three months, which has taken CVC's ownership of F1 from 63.4pc in May to almost half that.

Bambino, the Ecclestone family trust, owns 9.4pc, and Mr Ecclestone has an extra personal holding of a further 5.3pc

www.telegraph.co.uk/finance/newsbysector/retailandconsumer/leisure/9345515/German-banker-admits-he-took-bribe-from-Bernie-Ecclestone-for-the-2006-sale-of-Formula-1.html

[Macmoish]

TELEGRAPH


By Tom Cary, F1 Correspondent, in Valencia

Bernie Ecclestone admits he was ‘stupid’ to pay banker £28m after sale of Formula One to CVC Capital Partners

Bernie Ecclestone said that he had been “a bit stupid” to pay a German banker $44million (£28million) following the sale of Formula One to present owners CVC Capital Partners six years ago but insisted once again that he had done nothing wrong.

Gerhard Gribkowsky, formerly chief risk officer at BayernLB, told a Munich court on Wednesday that he had been bribed by Ecclestone during the sale of the bank’s 48 per cent shareholding in 2006. It is alleged that Gribkowsky ensured the sale of the sport to CVC, who retained Ecclestone as chief executive.

But Ecclestone, who is reportedly considering taking legal action against the banker, continues to insist that he was blackmailed by Gribkowsky, who was threatening to expose him to HMRC.

“I have always said that we gave him money but it was not for what he said,” said the 81 year-old, who appeared as a witness at the trial in November. “He was shaking me down a bit and saying I had control of a family trust which was not true. He was doing the best he could. I was a little bit stupid – normally I would have told him to get lost.”

The billionaire said his tax arrangements had been cleared by the British authorities two years later but at the time he had not wanted to get drawn into a potentially hugely expensive legal fight. The comments echo testimony Ecclestone gave to the trial. “The downside was it could have cost £2billion, so I paid him. My payment was just over £10million. As a business guy, I thought that was the better deal.”

A judgment in the case of Gribkowsky, who has been charged with tax evasion, breach of trust and being in receipt of corrupt payments, is expected next week. The banker faces a sentence of up to nine years but speculation within the sport centred on whether Munich’s state prosecutors might now charge Ecclestone; and if that happens, what action CVC might take.

Ecclestone shrugged aside the speculation as well as the delay to Formula One’s mooted flotation on the Singapore stock exchange. “It was just that the market is a bit turbulent,” he said. “When markets look a bit more stable, they will push the button.”

Meanwhile, Lewis Hamilton said he was anticipating “tough negotiations” with McLaren Group chairman Ron Dennis over a new contract to run from the start of next year. Dennis hinted in Canada that the economic situation would affect the pay it could offer Hamilton.

“Ron is a very tough negotiator,” Hamilton said. “But I don’t see there being many problems.”

www.telegraph.co.uk/sport/motorsport/formulaone/9348157/Bernie-Ecclestone-admits-he-was-stupid-to-pay-banker-28m-after-sale-of-Formula-One-to-CVC-Capital-Partners.html

[Macmoish]

www.businessweek.com/news/2012-06-27/ecclestone-co-perpetrator-in-bribery-scheme-prosecutor-says

Bloomberg NewsEcclestone ‘Co-Perpetrator’ in Bribery, Prosecutor Says

By Oliver Suess on June 27, 2012

Bernie Ecclestone was a conspirator in a bribery scheme that sent $44 million to a Bayerische Landesbank executive to clear the 2005 sale of the lender’s stake in Formula One racing, prosecutors said.

Formula One Chief Executive Officer Ecclestone, “hasn’t been blackmailed, he is a co-perpetrator in a bribery case,” public prosecutor Christoph Rodler said in closing arguments at a Munich trial against former BayernLB Chief Risk Officer Gerhard Gribkowsky. The two men agreed they “would support a sale of BayernLB’s Formula One stake to Ecclestone’s benefit.”

Ecclestone, who isn’t a defendant in the case and hasn’t been charged with the crime, is planning an initial public offering for Formula One in Singapore where shareholders intend to raise as much as $3 billion. Gribkowsky, on trial for accepting bribes, breach of trust and tax evasion, confessed last week to the charges and said Ecclestone bribed him during the sale of the lender’s stake in the racing company to CVC Capital Partners Ltd.

Gribkowsky told the court the indictment against him was “in most parts” correct. In exchange for his confession, the judges informally agreed Gribkowsky would get a prison term ranging from 7 years and 10 months to 9 years. Rodler sought a longer sentence of 10 years and six months today.

“Gribkowsky’s confession came at a late stage on day 45 of the trial, but at least it was made,” Rodler said referring to payments made by Ecclestone to Gribkowsky. “Ecclestone doesn’t give away money, he generates it; that’s why bribery remains as the only explanation.”
Not Concerned

Ecclestone said June 21 he doesn’t expect to be charged and that he was “not at all” concerned the case would disrupt Formula One’s planned IPO in Singapore.

Ecclestone, who is being investigated by Munich prosecutors over the issue, told the court last year he was caught up in a sophisticated shakedown and paid Gribkowsky because he feared the banker might tell U.K. tax authorities about a family trust controlled by his then wife.

Prosecutors charged Gribkowsky, who managed Munich-based BayernLB’s interest in Formula One, with accepting bribes, breach of trust and tax evasion. They claim he received $44 million to steer the sale of the bank’s 47 percent stake in the racing circuit to CVC, a U.K.-based buyout firm, and also agreed to a sham contract under whichEcclestone received a kickback. Until last week, Gribkowsky denied the claims.
Vital Interest

“Ecclestone had a vital interest to get rid of the banks as he feared for his life’s work,” Rodler said. “He massively supported the sale with everything within his power.”

At the same time, “Gribkowsky was looking for an exit from the dusty state-owned bank and the sale of the Formula One stake was his last chance to play a role in the racing series,” Rodler added.

BayernLB acquired the Formula One stake after the 2002 bankruptcy of Leo Kirch’s media group. Gribkowsky clashed with Ecclestone and sued him in London over corporate-governance rules changed to limit the lender’s influence. Ecclestone wanted to push BayernLB out and saw a chance when CVC showed interest, prosecutors said.

To contact the reporter on this story: Oliver Suess in Munich at [e-mail]

To contact the editor responsible for this story: Anthony Aarons at [e-mail].

[Macmoish]

BBC

Ex-banker jailed for taking bribes from Bernie Ecclestone
Gerhard Gribkowsky former BayernLB banker Former BayernLB banker Gerhard Gribkowsky was jailed for eight and a half years for taking $44m in bribes
Continue reading the main story
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Former banker Gerhard Gribkowsky has been jailed for more than eight years for taking $44m (£28m) in bribes from Formula 1 president Bernie Ecclestone.

He was given a reduced sentence after admitting charges of corruption.

The charges relate to the sale of the motorsport business to private equity group CVC Capital Partners in 2006.

Mr Ecclestone said he had paid Gribkowsky to avoid a UK tax inquiry but denied the money had been a bribe.

CVC bought majority control of F1 from Bernie Ecclestone's family trusts and a group of investment banks.

As part of the 2006 sale, BayernLB had also sold its 48% stake in Formula 1. BayernLB's then chief risk officer, Mr Gribkowsky, had been in charge of the sale.
Bernie Ecclestone Mr Ecclestone has said he expects to be cleared of any wrongdoing but admits paying Gribkowsky money

Giving evidence to the Munich court last week, Gribkowsky had admitted that prosecution claims that he had corruptly received $41.4m in bank commissions, and a large payment via a family trust from Mr Ecclestone, were "essentially true".
'Driving force'

Presiding judge Peter Noll said Gribkowsky had shown "high criminal energy" as he convicted him on charges of bribery, tax evasion and breach of fiduciary trust.

But, Judge Noll described Mr Ecclestone as the "driving force" behind the payments.

In his testimony, Mr Ecclestone had said that he had been worried that if he had not paid the money, Gribkowsky would have alerted the UK tax authorities to "things" that might have led to a tax inquiry.

"The only alternative was that the British tax authorities followed a case that would have been very expensive for me," he had said.

"The tax risk would have exceeded £2bn," Mr Ecclestone had added, "I paid him to keep calm and not to do silly things."

Mr Ecclestone has been subject to an investigation by German prosecutors but no charges have been filed against the 81-year-old.

He denies wrongdoing and has said he was the victim of coercion by Gribkowsky.

In reaction to Wednesday's verdict, Mr Ecclestone said: "I think Mr Gribkowsky told them what he thought he had to tell them. I don't think I should (face further action) but you don't know, do you?"

Mr Ecclestone remains F1's chief executive and retains a large shareholding in the sport.

www.bbc.co.uk/news/business-18625773