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Ecclestone to get the chop?

2013-11-19 08:57

COULD THIS BE THE END OF BERNIE? F1 boss Bernie Ecclestone could be fired by CVC if the F1 chief executive is found guilty of fraud. Image: AFP

LONDON, England - Formula 1 shareholder CVC said it would not hesitate to sack supremo Bernie Ecclestone if he had committed a crime in his dealings with a jailed German banker, the company’s co-founder Donald Mackenzie told a court on November 18 2013.

Mackenzie denied that Ecclestone, who has built F1 into a global money-spinner over the past four decades, was being kept in his post because of his importance to the business. Ecclestone remains a hands-on chief executive at the age of 83.

Mackenzie told a hearing at London's High Court: "If it is proven that Mr Ecclestone has done anything that is criminally wrong, we would fire him."


Ecclestone is facing a damages claim equivalent to R1-billion over allegations that he sold the business for too little when CVC became the largest shareholder in a deal agreed in late 2005.

The legal fallout from that deal has raised questions about whether Ecclestone can maintain his long grip on the sport and further complicated stalled plans to list the business on the stock market in Singapore.

Lawyers for German firm Constantin Medien argue that Ecclestone favoured a sale to CVC because it
planned to keep him on as chief executive.

Mackenzie, a deal-maker who tends to avoid the media spotlight, told the court that Ecclestone had apologised for not immediately telling him about a multi-million dollar payment made to German banker Gerhard Gribkowsky after Gribkowsky's arrest in January 2011.

Mackenzie recalled a meeting with Ecclestone in February 2011 at which the F1 head told him of the payment, despite earlier denials.

Mackenzie told the court: "He told me that he had a meeting with one of his colleagues who had reminded him that he had made payments to Gribkowsky and he apologised for having forgotten this.

"He told me he had never lied to me and I must say that I had trouble believing you could forget payment equivalent to R400-million.”


A Munich court jailed Gribkowsky, former chief risk officer at German bank BayernLB for eight and a half years in 2012 over an equivalent of R440-million payment made by Ecclestone and an Ecclestone family trust after the CVC deal.

CVC paid BayernLB around R8.3-billion for a 47% stake in F1. Constantin, the successor company to former shareholder EM.TV, says it missed out on a share of the proceeds it would have been due had the stake fetched more than the equivalent of R10-billion.

Ecclestone told the court in November 2013 that he paid Gribkowsky around R163.3-million because the banker had threatened to make false claims about his tax status that could have cost him as much as R20-billion.

German authorities are due to decide in 2014 whether to put Ecclestone on trial for bribery over the payment. Ecclestone denies any wrongdoing.

Pressed about how lucrative the CVC investment had been, Mackenzie said it was one of the fund's top 10 deals but it had come at the price of some negative headlines.

"It is a successful investment apart from the adverse publicity and this is a good example of it," Mackenzie told the court.

With a stock market listing having failed to come off, CVC sold down its stake in 2012 from around 63% to 35.5%, bringing in US investment funds Blackrock and Waddell & Reed and Norway's Norges Bank as investors. The deals gave F1 an enterprise value equivalent to R91-billion.

Constantin has brought the case against Ecclestone, the Ecclestone family trust, Gribkowsky and former trust lawyer Stephen Mullens. CVC is not a defendant in the damages claim.

Court hearings are expected to continue into December.
Read more on:    bernie ecclestone  |  racing  |  f1  |  corruption  |  motorsport

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