LONDON (Reuters) - German bank BayernLB plans to bring a $400 million damages claim against Formula One boss Bernie Ecclestone in London next month, the latest legal battle relating to the sale of the motor racing business in 2005.
German company Constantin Medien is already seeking more than $100 million from 83-year-old Ecclestone in a separate case being heard in the High Court in London.
The claims relate to allegations that Ecclestone undervalued Formula One when private equity fund CVC became its largest shareholder eight years ago. Ecclestone is accused of favoring a sale to CVC to help ensure he remained chief executive of a business he had built up over three decades.
“We can confirm that BayernLB is working at high speed on civil charges against Mr Ecclestone and expects to file suit against him in the High Court in London in January 2014,” a spokesman for BayernLB said on Wednesday.
A person familiar with the matter said the state-backed bank would be seeking up to $400 million in damages.
Ecclestone was not immediately available for comment but said he would fight the German bank in court when it first raised the prospect of legal action in October last year.
The legal fallout from the share sale is threatening Ecclestone’s long hold on the commercial reins of the sport. The uncertainty makes it hard to revisit stalled efforts to launch an initial public offering on the Singapore stock market.
CVC paid about $830 million for BayernLB’s 47 percent stake in Formula One. The business had fallen into the hands of a group of banks after the collapse of German media company and controlling shareholder Kirch.
A Munich court in 2012 jailed Gerhard Gribkowsky, former chief risk officer at BayernLB, for tax evasion and bribery for taking a $44 million payment from Ecclestone and his family trust after the sale.
Giving evidence in the Constantin Medien case in the High Court last month, Ecclestone said that he paid Gribkowsky 10 million pounds ($16 million) as an “insurance policy” because the German banker was threatening to make damaging claims about his tax affairs to the British authorities. He said the payment had nothing to do with the CVC deal.
A Munich court is expected to decide in the new year whether Ecclestone will have to stand trial for bribery.
Reporting by Joern Poltz in Munich; Writing by Keith Weir; Editing by David Goodman