Ecclestone Steps Down from F1 Board (2nd Update)

UPDATE #2 In London, Eason & Charter reported Ecclestone "has been stripped of ultimate power" over F1. This "is the crucial moment in the history of F1: Ecclestone’s rule over the sport has been total until now." The criminal trial "brings to a head the legal woes that threaten to end Ecclestone’s near-40 year tenure as ruler of F1." However, he then "faces two more actions" — one in Germany and another in the U.S. — that amount to claims for more than $1B. The papers from the Constantin action in London’s High Court "have been passed to prosecutors in Germany and will be studied by lawyers working on the two new civil claims." London Times.

The BBC's Andrew Benson opined, "The decision means that, to some degree, nothing changes for now. In reality, though, Ecclestone's impending trial on bribery charges has the potential to be a game-changer on a massive scale." Benson added, "If he is found guilty of paying a bribe — and the German courts have already convicted former banker Gerhard Gribkowsky of taking it — Ecclestone cannot possibly continue in his job." BBC

REUTERS' Keith Weir wrote Ecclestone's eye for a deal "has made him a fortune" and turned F1 "into a global money-spinner." Despite his age, the former car salesman "remains central to the commercial operations of a sport followed by millions of fans around the world and that considered a flotation on the stock market" in Singapore in '12. Ecclestone "has long dismissed talk of retirement but has acknowledged that a conviction in Germany would force him out, saying with typical bluntness that he couldn't run the business from jail." Reuters.

REUTERS' Poltz & Weir reported Ecclestone has been "ordered to stand trial on bribery charges in Munich." Ecclestone was charged last July with bribing Gribkowsky to "smooth the sale of a stake in Formula One to private equity firm CVC eight years ago." The Munich court said in a statement Thursday, "Under current planning, the main trial should start in late April." If convicted, Ecclestone "could be sentenced to up to 10 years in jail." Ecclestone has repeatedly said that the payment "had nothing to do with the CVC deal and that he was the victim of coercion by Gribkowksy who was threatening to make false claims about his tax status." Reuters

01/16/14

Ecclestone won't be smiling if he is found guilty

FORMULA 1 supremo Bernie Ecclestone has stepped down from the board of the company that runs the sport in order to fight bribery charges in Germany.

Despite the decision of the court in Munich, which indicted the 83-year-old last summer, he will continue to run the business on a day-to-day basis.

The impresario's legal problems date back to the sale of the sport to CVC Capital Partners in 2006. Investigators claim that he paid bribes of $44m to a now-jailed banker to undervalue a German bank's stake in the motor racing circus.

Ecclestone, who has controlled F1's commercial rights for decades, has been embroiled in other legal disputes over the sale, but the launch of criminal proceedings "will threaten his position as the most powerful man in motor sport," says the Daily Telegraph. They could also lead to a jail sentence.

What are the charges?
They relate to a "secret payment to Gerhard Gribkowsky, a banker who was involved in organizing F1's sale nearly a decade ago", explains Sky News. Gribkowsky worked for Bayern Landesbank, which was selling a 47 per cent stake in F1 acquired it from the bankrupt Kirch media group. The money was allegedly paid to Gribkowsky so he would undervalue the shares, allowing the CVC deal to go ahead.

Who is Gerhard Gribkowsky?
He was BayernLB's chief risk officer and was "instrumental in the sale of the bank's stake [in F1] to CVC", says the FT. Ecclestone has admitted paying the banker $44m, but says he was being "shaken down" by Gribkowsky, who was threatening to make false claims about him to the UK tax authorities. Gribkowsky was jailed for eight-and-a-half years by a Munich court in 2012 after admitting he accepted the payments. Ecclestone was a witness in the case.

Are there other cases?
Yes. Last year Ecclestone faced a $140m damages case in the High Court in London over the deal, brought against him by a German media firm, Constantin Medien. It claimed that it had lost out on a large commission because of the undervaluation of BayernLB's stake. A judgment on that case is expected from Mr. Justice Newey this month.

BayernLB is also planning legal action. Last month the bank confirmed it was "working at high speed on civil charges against Mr. Ecclestone and expects to file suit against him in High Court in London in January 2014".

To make matters worse, the FT reports: "Swiss prosecutors have also launched a criminal investigation into the circumstances of the $44m payments and a lawsuit has been filed in the US by a private equity group claiming that Mr. Ecclestone conspired to prevent it from buying F1 in 2005."

What will happen to Ecclestone?
His trial is expected to get underway in Munich on 23 April. "He will step down from the board of the CVC until the trial has concluded," reports the Telegraph. "However, he will remain in charge of F1's day-to-day management." The plan was suggested by Ecclestone himself, says the FT, which adds that he intends to "mount a strong defense". But if things go against him it could end his involvement in the sport. "He faces a possible jail term if found guilty, something he has previously said would force him to stand down as head of F1," says the BBC. The Week UK

01/16/14 We will pass more information along as we receive it. However, numerous outlets are reporting that Formula 1 Supremo Bernie Ecclestone will step down from the board of F1's parent company pending his bribery trial in Germany.

Ecclestone will continue to run the day-to-day operations of F1.

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