12/11/2013
NEWS STORY
Back in September Pitpass wrote about a revelation which we claimed "shows that it is nonsense to conclude that Ecclestone paid a bribe to ensure that he remained in his job."
The revelation came from Max Mosley, former president of the FIA and it has now been confirmed by Ecclestone himself.
It came in testimony from the F1 boss in London's High Court where he is being sued in a civil case by German media rights firm Constantin Medien. It alleges that in 2006 Ecclestone and his Bambino family trust paid £27.5m ($44m) to Gerhard Gribkowsky, an executive of German bank BayernLB (BLB), so that he would sell a 47.2% stake in F1 to the sport's current owner, the private equity firm CVC.
Constantin claims that Ecclestone wanted CVC to buy BLB's stake as it had agreed to retain him as F1's boss. Constantin had an agreement entitling it to 10% of the proceeds if the stake was sold for more than £690m ($1.1bn) but it missed out on a payment as CVC only paid £510m ($814m). Constantin claims that other buyers would have paid more but Gribkowsky did not explore these opportunities as he had an incentive to sell to CVC.
In his witness statement for the High Court case Ecclestone claimed that he would not have needed to pay a bribe to ensure that he stayed in his job because if F1 had been sold to an owner which wanted to remove him, it is likely that the deal would have been blocked by the FIA as Pitpass reported back in September.
Writing in the business-focussed newspaper CityAM, Pitpass' business editor Christian Sylt quotes Ecclestone saying that "BLB and Bambino would not have been able to sell their shares without my support, because the FIA needed to approve any change of control. If I was going to leave or be removed as the Representative, or if I had not thought that the new owner was suitable for Formula One, the FIA would have been very concerned and would be likely to refuse its approval."
Ecclestone says that it nearly came to this when BLB took over its 47.2% stake in F1. The bank got the shares in 2002 after German media empire Kirch went bankrupt. BLB had lent £690m ($1bn) to Kirch to acquire the stake in F1 and when it failed to repay the money the bank took over the shares.
Ecclestone said in court that "when Kirch went into liquidation, and the bank had to take the shares for security, the FIA wanted to make sure I was staying on, otherwise they would have withdrawn the licence to the banks. And then they would have just had a lot of documents and nothing else."
He adds that if he had not stayed in the driving seat the FIA would not have given the green light to CVC buying F1. "The FIA wouldn't have agreed it unless I agreed to stay with CVC. Unless I had a contract with CVC, the FIA wouldn't have approved the deal."
It is the first time that Ecclestone has acknowledged this veto right which is enshrined in the FIA's F1 contracts. His testimony closely reflects Mosley's comments. At the time of the sale to CVC Mosley was president of the FIA and chairman of its World Motor Sport Council (WMSC) which had the power to veto or grant consent. Mosley had the casting vote on the WMSC which Ecclestone himself also sat on along with 24 other motorsport managers.
Mosley told Pitpass in September that "the decision would have been for the WMSC where, as everyone knows, Bernie has many friends and supporters after all these years, so he would have had strong backing quite apart from anything I might have thought" He added that Ecclestone "would have been very confident he could not be removed by a new purchaser had there ever been any question of this."
Ecclestone says that a statement from Mosley forms part of his defence to the charges in the High Court trial and he adds "how would I have to pay somebody to keep a job? They couldn't have sold the shares to anyone unless I was a part of the package."