F1 supremo Bernie Ecclestone in Hot Water

The trial of a former Bayerische Landesbank manager, Gerhard Gribkowsky may shed some light on fraudulent business practices employed at Formula One. Gribkowsky was charged in July with accepting bribes, breach of trust and tax evasion, but the world is waiting to see whether Ecclestone will face charges too.  Prosecutors claim he received the bribes as part of the 2005 sale of BayernLB’s 47 percent stake in Formula One to. The trial has started in Munich and is scheduled to feature testimony from Formula One Supremo Bernie Ecclestone, who is also being investigated. "BayernLB's ownership of the Formula One shares, as well as of various banks, was a thorn in Ecclestone's eye from the beginning," said prosecution lawyer Martin Bauer. "At the moment a lot of the accusations center on Ecclestone's relationship with Gribkowsky," Cannon said. "If Gribkowsky is found guilty, there will inevitably be the implication that the accusations against Ecclestone have substance."

Ecclestone, who has denied any wrongdoing, is scheduled to testify Nov. 9 and 10. “It’s going to be fascinating,” said Tom Cannon, a professor at England’s Liverpool University who has researched the way Formula One and other sports are financed. “Ecclestone has found ways of resolving conflicts before they got to court; this time, he hasn’t managed to.” BayernLB had acquired the Formula One stake after the 2002 bankruptcy of Leo Kirch’s media group. Gribkowsky, BayernLB’s chief risk officer at the time, clashed with the Formula One chief and sued him in a London court over corporate-governance rules Ecclestone changed to limit the lender’s influence.

Ecclestone wanted to push BayernLB out and saw a chance when CVC showed interest, prosecutors said in the indictment. Gribkowsky demanded $50 million from Ecclestone as a reward for consenting to the deal and threatened to disclose possible tax violations by a trust run by Ecclestone’s wife at the time, prosecutors said. Both men agreed on a plan that funneled $44 million to Gribkowsky through sham contracts and off-shore companies, according to prosecutors. Gribkowsky then single-handedly negotiated the purchase without seeking other bids, prosecutors said. BayernLB’s share was sold for 840 million euros ($1.16 billion).

In a fraught opening exchange on Monday, Brüssow accused the investigators of envy, and of failing to mention key witnesses. Brüssow added that the case against his client was "not sustainable and would collapse." He argued that Gribkowsky's actions had secured a good deal for the bank, which sold the shares for $839 million to CVC Capital Partners at a time when the value of the assets was threatened by a possible breakaway by F1 teams. "The fact is, our client defused a bomb," he said. Gribkowsky has been in custody since Jan. 5. The court has scheduled 26 days of trial and about 40 witnesses have been called to testify.

Earlier News:

Bernie admitted to paying Gerhard Gribkowsky £14m

Ecclestone named in bribery case

Ecclestone Denies $50m Corruption Payment