MOTORSPORT: F1 chief in the gun again

The Germans are chasing 84-year-old Formula One tsar Bernie Ecclestone again for big bucks.

Four months after he shelled out US$100 million to settle a bribery charge against him in Munich, the Bavarian state bank Bayerische Landesbank — or Bayern LB — is suing Ecclestone for 345 million Euros or almost $A520 million. And it wants almost a decade’s interest on that amount.

The bank claims it was massively dudded in the sale of its stake in F1 in 2005-2006.

It says the price at which its holding was transferred to private equity company CVC Capital Partners was grossly undervalued and that Ecclestone received “unjustified commissions”.

Bayern LB has invoked the word bribe again, even though Ecclestone’s settlement in August of the criminal case against him meant that, under German law, he was considered innocent.

Ecclestone admitted that he had slipped Gerhard Gribkowsky $US40 million but claimed he made that payment because Gribkowsky, a former chief risk officer of Bayern LB, had blackmailed him, threatening to tittle-tattle to British tax authorities about his financial affairs.

Several weeks into the trial Ecclestone agreed the $US100 million settlement with the authorities in Munich, with $US99 million going to the Bavarian state coffers and the other US$1 million to a children’s charity.

Ecclestone has made light of that settlement in his latest Christmas card, in which he is featured — with a bag containing $US100 million — being confronted by a highwayman who says: “This is not a robbery. I am collecting for the Bavarian state.”

But Bayern LB is not happy, with a spokesman saying it “has filed a lawsuit against Mr Ecclestone, the [Ecclestone] family foundation Bambino and others, and is asking for damages of 345 million Euros plus interest”.

“When the bank’s stake in Formula One was sold in 2005 and 2006 a board member was bribed.

“The sales contract was not negotiated, but it was finalised at terms dictated by Mr Ecclestone, which were disadvantageous for the bank.”

It has often been claimed that Ecclestone wanted to engineer the sale to CVC, rather than potential higher bidders, because he knew the private equity company would retain him as the commercial head of the sport.

He has remained at the helm, although he stepped aside from his board position at key F1 company Delta Topco during the bribery trial.

He has since resumed that board seat and this month has withstood perceived pressure from CVC that might have seen a new chairman installed with the prospect of driving Ecclestone out.

Britain’s BBC news service reported last week that CVC had made $US8.2 billion on its investment in F1, which once included more than the Bayern LB stake.

While CVC has sold some of its holding in F1 in recent years it stands to reap a lot more yet, especially if a share market float of the sport ever gets off the ground.

Two attempts to list it on the Singapore Stock Exchange in recent years have been aborted.

Although Bayern LB insists its F1 holding was undervalued in the transaction several years ago, the public prosecutor and several witnesses in the bribery trial said the bank had received a good price.

Bayern LB inherited its stake in F1 when the Kirch media empire in Germany collapsed after buying a majority holding in the business — much of it from a company associated with a former chairman of Australia’s Fairfax Media, American Brian Powers.

A subsequent Fairfax chairman, Ron Walker, has been a close associate of Ecclestone’s during the two decades of the Australian Grand Prix in Melbourne.

Walker, as chairman of the Australian GP Corporation, and Ecclestone this year agreed a five-year extension of Melbourne’s F1 race contract — signed off by the Victorian government — through to 2020.