28/07/2011
NEWS STORY
As Pitpass revealed last week, German prosecutors are expected to announce that more people have been accused in the case about the £27m payment to F1's jailed former chairman Gerhard Gribkowsky.
F1's boss Bernie Ecclestone has already admitted that he and his family's trust fund paid Gribkowsky after the German threatened to make unfounded allegations about him to the UK tax authorities. It was not a bribe for Gribkowsky to undervalue the shares in F1 held by his previous employer, German bank BayernLB, when they were sold to current owner CVC in 2006. Nor, says Ecclestone, was it a bribe for Gribkowsky to sell F1 to a company which wanted to keep him as boss. The German prosecutors however are fixated on there being a bribe and that's just the start.
Last week Gribkowsky was charged with tax evasion, breach of trust and receiving corrupt payments. Ecclestone has only been accused with what seems to be a vague claim of aiding and abetting a breach of trust and he is set to testify as a witness in a trial against Gribkowsky. However, Germany's Spiegel magazine is now reporting that six other associates and advisers connected to Gribkowsky and Ecclestone are due to be accused in the case. When Pitpass' business editor Chris Sylt heard this from his source last week he thought there would maybe one or two more people dragged into this so six comes as quite a surprise. The prosecutors seem to be casting their net far and wide.
Spiegel confirms, as Pitpass also stated last week, that Gribkowsky has changed his lawyer yet again. His first lawyer was Gerald Toifl, who is believed to have been Gribkowsky's adviser when he received the £27m payment. He was replaced with Reinhard Hoess and, according to Spiegel, he has now been switched for Cologne-based Rainer Brussow. Time will tell whether this affects Gribkowsky's fate.
Contrary to previous allegations, Ecclestone told Pitpass' business editor on Monday that he did not pay £27m to Gribkowsky as the prosecutors have accused. He says he only paid £14m and, again contrary to the allegations, he did not pay it to companies based in Mauritius and the British Virgin Islands. He first paid it into a single bank account, the details of which Gribkowsky provided to him on a piece of paper. When this payment bounced he paid the money to Gribkowsky's lawyer who presumably transferred it to the tax havens.
It is a complicated tale but the Financial Times quotes one of the investors in CVC itself who says that "there has not been much communication from CVC on F1 and we are slightly worried about it." However, the investor says that, regardless, "investors are willing to put up with a lack of communication as CVC has simply shown such great returns."
On the strength of this evidence it doesn't seem that CVC's investors are afraid of the proceedings in Germany and this follows up the theme of a column in the same paper last week entitled 'Investors may fear F1 probe'. It was written by Mark Kleinman, business editor of Sky News which is controlled by the company of the moment News Corp. The company is of course topical because of the phone hacking scandal engulfing it and because of the takeover bid for F1 that it is still planning to make according to a recent report on Sky News by Kleinman himself.
His FT column last week claimed that some of CVC's investors "are already said to be nervous about the F1 leadership issue. That can only be exacerbated by Mr Ecclestone's admission that he did in fact make the contentious payments, though not as a bribe." It claimed that "a failure to take tough decisions about the management of its most high-profile investment could translate into nervous investors voting with their wallets - and not in the way that CVC would wish."
Today's article in the FT concludes on a different tone by indicating that "people close to the situation said CVC's investors, although worried, would not revolt over the issue." At least we seem to have got to the bottom of that one.