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Rediff.com  » Sports » Ecclestone says will fight BayernLB damages claim

Ecclestone says will fight BayernLB damages claim

December 12, 2013 21:04 IST

Formula One boss Bernie Ecclestone said he would fight a $400 million damages claim that German bank BayernLB is planning to file in London over the sale of the motor racing business in 2005.

The fresh threat of legal action is the latest fallout from the deal eight years ago, in which private equity fund CVC acquired control of Formula One from a group of banks including BayernLB.

German company Constantin Medien is already seeking more than $100 million from the 83-year-old Ecclestone in a separate case which is close to concluding in the High Court in London.

Ecclestone is accused of undervaluing Formula One to favour a sale to CVC that kept him in charge of a business he had built up over three decades.

"If we get sued, we'll probably have to go to court, which is what we did with this last (Constantin) case," Ecclestone told Reuters on Thursday.

BayernLB had said on Wednesday it planned to bring a $400 million damages claim against Ecclestone in London next month.

Ecclestone said his lawyers had told him the vast majority of such damages claims were settled out of court, but he had no intention of doing so. "They picked the wrong person with me," said the British billionaire.

Legal problems stemming from the CVC sale threaten to end Ecclestone's long hold on a sport that attracts hundreds of millions of television viewers to its series of grand prix races held around the globe.

The legal issues also make it hard to revisit stalled efforts to launch an initial public offering of Formula One on the Singapore stock market.

CVC paid about $830 million for BayernLB's 47 percent stake in Formula One, after the business had fallen into the hands of a group of banks following 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 case in the High Court last month, Ecclestone said he had paid Gribkowsky £10 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.

The case is expected to close on Friday but a judgement is not expected until January at the earliest.

A Munich court is also expected to decide in the new year whether Ecclestone will have to stand trial for bribery over the payment to Gribkowsky.

Image: Bernie Ecclestone

Photograph: Clive Mason/Getty Images

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