Munich Trial Set F1 Boss Ecclestone for Corruption

Posted: 9:55 pm, January 16, 2014 by Jeffrey Ely

The Munich state court said Thursday Jan. 16, 2014 that it has decided to send to trial the indictment against the 83-year-old Ecclestone. photo: dpa

Munich (dpa) - Bernie Ecclestone is to go on trial in Germany in April on corruption charges relating to an alleged 44-million-dollar kickback, a court spokeswoman said Thursday, in the worst blow yet to the embattled Formula One boss.

The judges’ decision could spell the end for the 83-year-old businessman who has run the sport since the late 1970s, when he acquired the right to sell live coverage of the races to the world’s television channels.

Ecclestone has insisted that he did “nothing illegal.” photo: dpa

Analysts say the main F1 sponsors, global car manufacturers, may lean on him to retire now that judges think there is evidence that he may have committed a crime.

Formula One Group said the would leave its board for the duration of the German trial, but “continue to run the business on a day to day basis” as a non-board executive.

Ecclestone’s lawyers said he continued to deny the charges.

“Our position remains that the alleged bribery did not take place,” said his German counsel in a statement. They called the evidence unconvincing and said letting a trial go ahead did not mean the charges were true.

Judges at the Munich state court admitted the case to trial six months after Ecclestone was indicted. They had the option of throwing it out of court or accepting it. Part of the delay was because one judge on the panel retired and a new one had to settle into the job.

The Briton, the chief executive of Formula One Group, is accused of bribery and incitement to misappropriation during a 2006 mega-deal in which Formula One Group was acquired from a group of banks by London-based CVC Capital Partners.

He also faces civil damages claims in London over the 2006 transaction, but the criminal case in Germany is the most serious of his legal problems, since it could potentially lead to imprisonment. The maximum possible sentence for the charges is 10 years.

Delta Topco, the company at the apex of the Formula One Group of companies, said Ecclestone proposed to other board members that he step down with immediate effect. He would be “subject to increased monitoring and control by the board,” Delta Topco said.

Despite his age, no successor to run F1 has been settled. The sport is one of the world’s biggest entertainment franchises, and even the tracks that host the races must pay Ecclestone’s firm for the opportunity.

Leaders of the sport played down the news. FIA, the world automotive body that oversees motor racing, declined comment.

At team Red Bull, it was business as usual, with invitations going out to the media to see the stable’s new car at the end of this month.

“This will settle down,” said Red Bull adviser Helmut Marko. “As far as we’re concerned, he’s to be presumed innocent unless he is convicted and loses all the appeals.”

Ecclestone is alleged to have charged a German bank a 66-million-dollar commission at the time it was selling its stake in Formula One to CVC Capital Partners, and to have kicked back 44 million dollars of the amount to Gerhard Gribkowsky, the chief risk officer of the bank, Bayern LB.

The sale to CVC Capital Partners secured Ecclestone’s control of the sport, since the new owners appointed him chief executive.

Gribkowsky was sentenced in 2012 to eight and a half years for accepting the kickback.

Ecclestone admitted in court to paying the sum but denied it was illegal. However the trial judge, Peter Noll, said Gribkowsky was “led into crime” by Ecclestone. Noll is presiding judge of the panel that has now agreed to put Ecclestone on trial.

Lawyers Thomas and Scharf said their defence case would challenge Gribkowsky’s veracity.

In a civil case in London that opened in October, Ecclestone repeated in his testimony his claim that Gribkowsky extorted the money from him with a threat to report Ecclestone’s family trust to British tax authorities.

By Daniela Wiegmann and Jean-Baptiste Piggin