The High Court in London dismissed a civil damages claim last week against Bernie Ecclestone, the chief executive officer of Formula 1, arising from a sale of shares in the Formula 1 Group. He still faces criminal charges of bribery in a Munich court.
Prosecutors allege that the payment to the banker, Gerhard Gribkowsky, was to ensure that F1 was sold to a private equity group of Ecclestone’s choosing and allow Ecclestone to retain control of the sport.
Ecclestone admitted in 2012 to paying Gribkowsky, the manager of Bayern LB. He has denied the bribery charge, arguing that he was the victim of blackmail because Gribkowsky threatened to reveal false information to UK tax authorities.
The claimant in the civil case decided last week, a German media company, had an interest in proceeds of the shares if they were sold above a specified price. The claimant contended that Ecclestone arranged a sale of the shares at an amoiunt that undervalued them, thereby leaving the claimant with a valueless interest.
The claim for damages was dismissed. This was mainly because the claimant was not able to prove (under German or English law) either that there had been a sale of the tainted shares at an undervalue, or that the alleged conspirators to the sale had a deliberate intention to harm the claimant.
Despite the ruling, the judge found that the payments Ecclestone made constituted a bribe. The judge considered Ecclestone’s assertion that he had made the payments to Gribkowsky in response to a blackmail threat to reveal his tax affairs as “thoroughly implausible.”
In his written judgment, the judge said the object of the bribe was not to effect an undervalue of the shares, as the claimant contended, but to remove the banks’ influence in the running of F1.
The judge wrote: “The truth, I think, is that Mr. Ecclestone was most unhappy that the banks…had shared in the Formula One group. … He saw the banks as a very real threat to his ability to manage the group as he wished.”
The judge wrote that the payments were made “because Mr. Ecclestone had entered into a corrupt agreement with Dr. Gribowsky in May 2005 under which Dr. Gribowsky was to be rewarded for facilitating the sale of BLB’s shares in the Formula One group to a buyer acceptable to Mr. Ecclestone.”
The civil judgment also discussed details about the murky use of offshore jurisdictions and shell companies that had a role in the various transactions.
Alistair Craig is a commercial barrister practicing in London.