London: Formula One shareholder CVC would not hesitate to sack motor sport boss Bernie Ecclestone if he had committed a crime in his dealings with a jailed German banker, CVC co-founder Donald Mackenzie told a court on Monday. Mackenzie denied that Ecclestone, who has built Formula One into a global money-spinner over the past four decades, was being kept in his post because of his importance to the business. Ecclestone remains a hands-on chief executive at the age of 83.
"If it is proven that Mr Ecclestone has done anything that is criminally wrong, we would fire him," Mackenzie told a hearing at London's High Court. Ecclestone is facing a $100 million damages claim over allegations that he sold the business for too little when CVC became the largest shareholder in a deal agreed in late 2005.
The legal fallout from that deal has raised questions about whether Ecclestone can maintain his long grip on the sport and further complicated stalled plans to list the business on the stock market in Singapore. Lawyers for German firm Constantin Medien (EV4G.DE) argue that Ecclestone favoured a sale to CVC because it planned to keep him on as chief executive.
Mackenzie, a deal-maker who tends to avoid the media spotlight, told the court that Ecclestone had apologised for not immediately telling him about a multi-million dollar payment made to German banker Gerhard Gribkowsky after Gribkowsky's arrest in January 2011.
Mackenzie recalled a meeting with Ecclestone in February 2011 at which the Formula One head told him of the payment, despite earlier denials. "He told me that he had had a meeting with one of his colleagues who had reminded him that he had made payments to Gribkowsky and he apologised for having forgotten this," Mackenzie told the court.
"He told me he had never lied to me and I must say that I had trouble believing you could forget payment of $40 million," Mackenzie said. A Munich court jailed Gribkowsky, former chief risk officer at German bank BayernLB BAYLB.UL for 8-1/2 years in 2012 over a $44 million payment made by Ecclestone and an Ecclestone family trust after the CVC deal.
CVC paid BayernLB around $830 million for a 47 percent stake in Formula One. Constantin, the successor company to former shareholder EM.TV, says it missed out on a share of the proceeds it would have been due had the stake fetched more than $1.05 billion.
Ecclestone told the court this month that he paid Gribkowsky around 10 million pounds because the banker had threatened to make false claims about his tax status that could have cost him as much as $2 billion. The German authorities are due to decide next year whether to put Ecclestone on trial for bribery over the payment. Ecclestone denies any wrongdoing.
Pressed about how lucrative the CVC investment had been, Mackenzie said it was one of the fund's top 10 deals but it had come at the price of some negative headlines. "It is a successful investment apart from the adverse publicity and this is a good example of it," Mackenzie told the court.
With a stock market listing having failed to come off, CVC sold down its stake last year from around 63 percent to 35.5 percent, bringing in U.S investment funds Blackrock and Waddell & Reed and Norway's Norges Bank as investors. The deals gave Formula One an enterprise value of $9.1 billion.
Constantin has brought the case against Ecclestone, the Ecclestone family trust, Gribkowsky and former trust lawyer Stephen Mullens. CVC is not a defendant in the damages claim. Court hearings are expected to continue into next month.
Comments
0 comment