LONDON (Reuters) - Bernie Ecclestone’s management of Formula One will face scrutiny next week when a German media firm seeks more than $100 million in damages over a deal that made CVC Capital Partners the motor sport’s main shareholder.
The civil case in London’s High Court is scheduled to open on Tuesday, a day after the diminutive Ecclestone turns 83. Despite his age, Ecclestone remains the hands-on chief executive of a business he has helped to turn into a global money-spinner over the last four decades.
German company Constantin Medien will argue that Ecclestone and three other defendants deliberately undervalued Formula One when private equity fund CVC bought into the business in 2005.
The legal fallout from the sale has already seen a former German banker jailed in Munich, complicated plans to float Formula One on the stock market and brought the Ecclestone succession issue into focus.
Germany’s BayernLB was one of the banks left in control of Formula One a decade ago after the collapse of Bavarian Leo Kirch’s media empire, which owned the rights. BayernLB sold a stake of 47 percent to private equity firm CVC for around $830 million in 2005.
As the successor company to a former Formula One shareholder, Constantin says it missed out on a share of the additional proceeds had the stake fetched a higher price.
The damages claim compares with a market capitalization of around 137 million euros ($189 million) for Constantin, a sports-focused media group based in southern Germany.
Ecclestone, who denies any wrongdoing, has been accused of favoring a sale to CVC because it wanted to keep him on as commercial chief of a sport that attracts hundreds of millions of TV viewers to the races it stages around the globe.
He told Reuters that he expected to be called as a witness in the damages case next month after he has attended the Indian Grand Prix this weekend and the race in Abu Dhabi on November 3.
Ecclestone said it was business as usual despite the distraction of a case that could last for more than a month.
“I‘m doing what I do, and that’s it. I‘m committed to Formula One,” he said.
Ecclestone, who has a personal fortune of more than 2 billion pounds ($3.2 billion), has always said he has no plans to retire but has added he would step aside if convicted in Germany, where a court is expected to decide next year whether he should stand trial on bribery charges related to the sale to CVC.
Gerhard Gribkowsky, former chief risk officer at BayernLB, has been jailed for more than eight years for tax evasion and bribery after taking a $44 million payment from Ecclestone as part of the deal.
Ecclestone does not deny paying Gribkowsky but said he was the victim of extortion after the German threatened to make false claims over his tax affairs.
Ecclestone’s former lawyer Stephen Mullens, the Ecclestone family’s Bambino Holdings and Gribkowsky himself are the other defendants in the damages claim brought by Constantin in London.
($1 = 0.6244 British pounds)($1 = 0.7260 euros)
Editing by Will Waterman