German Prosecutors Reveal F1’s Bernie Ecclestone Was Blackmailed (2nd Update)

UPDATE #2 Formula One boss Bernie Ecclestone has rejected accusations of bribery, telling a Munich court today that the German banker who received a disputed $44 million (£26m) payment didn't tell the truth.

In a case that could threaten his grip on the sport, Ecclestone said in a personal statement, read out in German by his lawyers, that he was "grateful" to be able to give his side of the story – though he told judges that he would answer questions from the Munich state court through his lawyers, rather than personally.

The defense made clear that it will attack Gribkowsky's credibility, and Ecclestone said in his statement that the banker didn't tell the truth.

Ecclestone has said in the past that he was "shaken down".

In Thursday's statement, Ecclestone reiterated testimony he gave at Gribkowsky's trial that he gave the banker the money because he was worried Gribkowsky would falsely accuse of him of being in charge of a trust fund set up for the Formula One boss's former wife and their children – possibly incurring a huge British tax bill.

Ecclestone's lawyers also insisted anew that their client is innocent, saying in a written statement that "the alleged bribe has not occurred".

They argued that the indictment is based on statements by Gribkowsky that are "incorrect, misleading and incoherent".

"They do not take account of the real course of events in 2005 and 2006 regarding Formula 1 and the life of Mr. Ecclestone," the lawyers said, adding they would produce new documents at the trial to dispute Gribkowsky's statements. In part from The Telegraph Newspaper

04/23/14 In London, Kevin Eason reported Ecclestone could be ordered to pay as much as $400M "to escape the threat of jail." Citing sources Ecclestone "should reach a financial settlement with the authorities in Munich rather than risk a prison term of up to ten years if convicted." However, that would "entail accepting that he was guilty," which would mean that "he would be forced to walk away from the sport over which he has ruled for four decades." London Times

04/23/14 German prosecutors have made the startling revelation that they believe Formula One’s chief executive Bernie Ecclestone was blackmailed by former banker Gerhard Gribkowsky.

The revelation is surprising because it reflects Mr. Ecclestone’s defense to charges issued by the same prosecutors that he bribed Mr. Gribkowsky. The bribery trial against Mr. Ecclestone will get under way in the German city of Munich tomorrow and the billionaire auto racing boss could be imprisoned for up to 10 years if he is found guilty.

Mr. Ecclestone has been in F1’s driving seat for nearly 40 years and has fended off challenges from the world’s largest auto manufacturers, media giants and politicians. He turns 84 this year but instead of giving up the wheel he is facing the biggest battle of his career.

The consequences of losing the trial could be far-reaching as Mr. Ecclestone is still in day-to-day control of F1 and personally negotiates the most valuable deals in the race series. Its parent company Delta Topco makes $1.6 billion in annual revenue and its key trading subsidiary Delta 2 made underlying profits of $286 million last year according to Britain’s Daily Telegraph.

Crucially, despite his advancing age and the possibility that he could be imprisoned, Mr. Ecclestone has no successor. His business relationships are so long and strong that it has been suggested there will be an exodus of senior managers from F1 when he steps down.

“There will be a number of promoters who will retire when Bernie retires," Ron Walker, chairman of the Australian Grand Prix Corporation, told the magazine Autoweek in 2012. “Promoters have a very special relationship with Bernie. He is more of a friend than a business colleague."

It shows that there is much more at stake than just one man’s freedom as F1 itself could be dented by the affair. The private equity firm CVC has most to lose as it is F1’s largest shareholder with a 35% stake which is worth an estimated $4.2 billion. CVC took over F1 in 2006 and the origins of Mr. Ecclestone’s current predicament date back to then. More at Forbes.com

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