Ecclestone accused of 'corrupt bargain' in Formula One sale

Formula One boss Bernie Ecclestone at the Formula One Singapore Grand Prix on Sept 19, 2013. Mr Ecclestone was accused of making a "corrupt bargain" in a bid to maintain his grip on the sport, in a hearing in London's High Court on Tuesday. -- FILE P
Formula One boss Bernie Ecclestone at the Formula One Singapore Grand Prix on Sept 19, 2013. Mr Ecclestone was accused of making a "corrupt bargain" in a bid to maintain his grip on the sport, in a hearing in London's High Court on Tuesday. -- FILE PHOTO: AFP

LONDON (AFP) - Formula One chief Bernie Ecclestone was accused of making a "corrupt bargain" in a bid to maintain his grip on the sport, in a hearing in London's High Court on Tuesday.

A German media group which claims it lost out as a result of Mr Ecclestone's Formula One stake sale has launched legal action against the 83-year-old British tycoon.

Swiss prosecutors announced Tuesday they were also looking into the issue.

Mr Ecclestone, whose involvement with Formula One has helped turned it into a global business worth billions of dollars, was not in court on Tuesday.

The key charge levelled against him is that he paid US$44 million (S$54 million) in bribes to a German banker to engineer the sale of Formula One to current owners CVC Capital Partners in 2005.

A lawyer representing the German group, Constantin Medien, told the High Court that Mr Ecclestone entered into the "corrupt agreement" with a banker to facilitate the sale of the Formula One group to a buyer "chosen" by him.

Mr Ecclestone says Constantin's claim "lacks any merit" and denies any "conspiracy".

Mr Gerhard Gribkowsky, formerly the chief risk officer of German bank BayernLB, has been jailed for eight-and-a-half-years by a Munich court for receiving corrupt payments.

Mr Ecclestone does not deny paying Mr Gribkowsky but has insisted he was the victim of a blackmail plot by the German.

Constantin Medien, which owned an interest in Formula One via BayernLB, holder of 47 per cent of the stock, alleges that the $$820 million price tag paid by CVC was intentionally undervalued.

Within months of the deal, the value of CVC's stake had reportedly jumped to US$2.8 billion, making it one of the most profitable deals in the private equity group's history.

Last month, Munich prosecutors delayed setting a date for Ecclestone's bribery trial until next year.

Swiss prosecutors said on Tuesday they had opened their own probe.

"The Geneva prosecutor's office has opened an investigation following a complaint by the company Constantin Medien," spokesman Henri Della Casa told AFP.

Mr Della Casa declined to name Ecclestone directly, but confirmed the accuracy of media reports which said he was the target of the investigation.

The decision to open a probe in no way implies any wrongdoing on Swiss soil, Mr Della Casa said.

"The goal is to establish whether the facts constitute an offence under Swiss criminal law," he explained.

The legal wrangling has cast a shadow over renewed plans to float Formula One which were already put on hold last year due to rocky markets.

CVC is reportedly seeking a valuation of more than US$10 billion when the flotation finally goes ahead.