Ecclestone Formula One Bribery Case Goes to Trial
The High Court in London has set a date to hear the bribery and corruption claims against Bernie Ecclestone, in connection with the sale of Formula One to CVC Capital Partners. Following a decision which coincides with the opening of the 2018 Formula One season this weekend, the trial will commence on 1 October 2019.
Bluewaters Communications Holdings LLC, an investment vehicle specialising in telecoms and media assets, claims that its bid for a controlling stake in Formula One was derailed by a corrupt agreement reached between Mr Bernard Ecclestone and Dr Gerhard Gribkowsky, the banker responsible for the sale of the controlling stake, owned by German bank, Bayerische Landesbank (BLB).
Simon Bushell, a partner at Signature Litigation commented: “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.”
Mr Bushell added: “The timing is key. 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.”
By early 2005, BLB had begun to object to the management style of Mr Ecclestone and were looking to sell their shares. Bluewaters was introduced to BLB as a potential purchaser, and negotiations began, during which Bluewaters alleges that Mr Ecclestone sought, but did not receive, assurances he would remain CEO and enjoy full control of Formula One.
Bluewaters alleges that in response, Mr Ecclestone took steps to ensure that BLB’s shares in Speed were sold not to Bluewaters but to a company approved by Mr Ecclestone – in the end, CVC Capital Partners.
In June 2012, Dr Gribkowsky confessed to accepting secret payments arranged by Mr Ecclestone and a vehicle owned by the Ecclestone family trust, Bambino Holdings Limited (also a defendant to Bluewaters’ claims).
Mr Ecclestone initially denied all knowledge of the secret payments, but later claimed that Dr Gribkowsky tried to “shake him down” by threatening to disclose to HMRC details of his relationship with Bambino which would have led to a significant tax liability for Mr Ecclestone. In a separate trial, again in London in February 2014, Mr Justice Newey rejected Mr Ecclestone’s “shakedown” defence as “thoroughly implausible”. Shortly afterwards, Mr Ecclestone faced criminal proceedings in Germany in relation to the secret payments, but that trial was suspended mid-way through upon
Mr Ecclestone offering to make a payment of USD 99 million to the Bavarian government.
Bluewaters now understand that, whilst it was in negotiations with BLB in the period April to June 2005, Mr Ecclestone reached what Mr Justice Newey described as a “corrupt arrangement” with Dr Gribkowsky. Following negotiations,
Bluewaters submitted an offer to BLB on 29 June 2005 and received a letter of rejection dated 13 July 2005, referring to an apparent but unexplained failure to meet BLB’s conditions. From that point, Bluewaters was stonewalled, and their efforts to engage with BLB were largely ignored. CVC Partners emerged as a potential bidder in around September 2005.
Bluewaters is seeking substantial damages from Mr Ecclestone and Bambino. In addition, Bluewaters claims damages against BLB on the basis that they are liable for the actions of Dr Gribkowsky. Mr Ecclestone continues to maintain his “shakedown” defence, whilst BLB admit that there was a corrupt arrangement, but deny liability.
