Financial News

  • 17 January 2014, 13:13

Ecclestone To Stand Trial On Bribery Charge

German prosecutors have confirmed that the Formula 1 boss Bernie Ecclestone is to stand trial this year charged with offences related to the sport's sale in 2005.

In a statement on Thursday morning, a spokeswoman for the Munich court said the case against Mr Ecclestone would get underway in the spring following his indictment last July.

"Under current planning, the main trial should start in late April," the statement said, with sources indicating that it had been provisionally scheduled for April 23.

Sky News exclusively revealed on Wednesday that the Munich prosecutor was preparing to file formal charges against the F1 supremo, who has exerted an iron grip on the sport's commercial rights for the best part of half a century.

Board directors of F1's parent company convened a meeting on Thursday morning to discuss the developments, sources said.

Mr Ecclestone is expected to continue running F1 on a day-to-day basis although he will step down from the board of the company on a temporary basis while he fights to clear his name, insiders said.

An official statement from the board of F1 is expected later.

The charges against Mr Ecclestone relate to a $44m (27m) secret payment to Gerhard Gribkowsky, a banker who was involved in organising F1's sale nearly a decade ago.

The bribery trial will represent the latest, although not the only, legal setback to confront Mr Ecclestone in recent times.

He is a defendant at a High Court case in London at which a German media group has accused the F1 chief executive of conspiring to undervalue the sport when it was sold to CVC Capital Partners in 2005.

The "corrupt bargain" to which Mr Ecclestone was a party enabled him to remain at the helm of F1's commercial rights-holder, Constantin Medien has alleged.

Mr Ecclestone has consistently denied any wrongdoing.

He conceded that he had made part of the relevant payments to Mr Gribkowsky but said that he had done so because he was concerned that the German would make unfounded allegations about his tax affairs to Her Majesty's Revenue and Customs.

CVC has made billions of pounds from its original investment in F1 and has drawn up plans to float the company on the Singapore stock exchange.

It has conceded that that plan is unworkable until the legal issues surrounding the sport are resolved.

The private equity firm instead reduced its shareholding in the sport by selling a series of minority stakes to investors from the US and Norway.

Donald Mackenzie, the CVC founder who sits on the board of F1, said at the High Court in November that it was right to have retained Mr Ecclestone's services despite the legal maelstrom surrounding the sport.

"If Mr Ecclestone had done anything criminal or wrong, we would fire him," he said.

The phrasing of that statement is understood to mean that CVC has decided to allow Mr Ecclestone to continue running the sport even during his trial.

However, insiders suggested that he was likely to step down from the company's board with the possibility of being reinstated if he is subsequently cleared of wrongdoing.

Peter Brabeck, the chairman of the Swiss consumer goods giant Nestl?ho also chairs F1's parent company, is likely to take on a more hands-on role during the coming months.

In a statement, the board of Delta Topco, F1's parent, confirmed that it had met on Thursday, saying: "Mr Ecclestone has reassured the Board that he is innocent of the charges and intends to vigorously defend the case which will commence in late April 2014.

"After discussion with the Board, Mr Ecclestone has proposed and the Board has agreed that until the case has been concluded, he will step down as a director with immediate effect, thereby relinquishing his board duties and responsibilities until the case has been resolved."

The board said it believed that F1 would be best-served by Mr Ecclestone retaining his management responsibilities but said he would be "subject to increased monitoring and control by the Board."

Approval for significant commercial contracts would become the responsibility of Mr Brabeck-Letmathe and Mr Mackenzie, the deputy chairman, the board added.

:: Watch Sky News live on television, on Sky channel 501, Virgin Media channel 602, Freeview channel 82 and Freesat channel 202.

Advertisement