German bank executive Gerhard Gribbowsky has been arrested for allegedly accepting a $US50m kickback from the sale of a large stake in the holding company of F1's commercial rights.

Gribbowsky, formerly the risk manager of public bank BayernLB, who became chairman of F1 rights holding company SLEC before it was sold to CVC, is being held on charges of corruption, tax fraud and breach of trust toward his former employer.

German prosecutors allege that Gribbowsky led the bank to sell the stake "without evaluation of its current value" which, in turn, earned him "two consultancy contracts worth $50m." The money is said to have been paid to companies in Austria set up for the purpose. Claims in the German media suggest that the money was sourced from firms based in Mauritius and the Caribbean. A prosecution statement also alleges that Gribkowsky failed to pay taxes on the additional income.

CVC bought a 25% stake from Bernie Ecclestone as well as BayernLB's stake in 2006, thereby becoming F1's majority shareholder. The involvement of three German occurred when Kirch Group, to whom Ecclestone had sold a majority stake, went into liquidation, leaving the banks controlling the F1 assets.

The current F1 rights holder, CVC, has issued the following statement: "CVC confirms that it has no knowledge of, nor any involvement in, any payment to Mr Gribkowsky or anyone connected with him in relation to CVC's acquisition of Formula One."

Bernie Ecclestone has denied paying a bribe to a German banker arrested last week for corruption.

Gerhard Gribkowsky, once representing former F1 owner Bayerische Landesbank, is charged with accepting $50 million amid the sale of the sport's commercial rights to its current owners, CVC, five years ago.

CVC issued a statement insisting it had "no knowledge of, nor any involvement in, any payment to Mr. Gribkowsky or anyone connected with him in relation to CVC's acquisition of Formula One."

Asked if he has anything to do with the suspicious tale, F1 chief executive Ecclestone said on Saturday: "No; what the German newspapers speculate or the prosecutors suspect is false.

"It's absolute nonsense," the 80-year-old Briton told Bild-Zeitung newspaper.

Ecclestone admits to knowing Gribkowsky but insists he has "nothing to do with these payments" to him.

"I don't even know why I would have given him money," he insisted.

Ecclestone denied having bank accounts in the Virgin Islands or Mauritius or knowing a holding company linked to Gribkowsky's money.

"I don't know how he got it (the $50m)," he insisted. "As a member of the board of (F1 holding company) Delta Topco, he received only a small salary. I know because I was the CEO.

"You should ask the banks involved who might have paid him," added Ecclestone. "And if CVC says it has nothing to do with the payments, you can be absolutely sure they are telling the truth, I assure you.

"If German newspapers are writing that I have something to do with it, that's absolute nonsense and if necessary I will fight it in the courts."

FRANKFURT—German prosecutors have indicted Formula One Group Chief Executive Bernie Ecclestone for bribery in connection with $44 million he paid a Munich banker in 2006-07.

The indictment of the 82-year-old, known in Formula One as "Supremo," could force him out of the sport he has dominated for decades as an owner, manager and public face, according to people familiar with the sport. More worrisome for Formula One, Mr. Ecclestone's legal troubles threaten to upend the multibillion-dollar racing circuit's ties to major sponsors, teams and fans.

Enlarge Image
image
Getty Images
Formula One boss Bernie Ecclestone, seen here during practice for the German Grand Prix on July 5.

The regional court in Munich said in a statement that an indictment alleging corruption and abetting in the breach of fiduciary duty was delivered on May 10, and since then has been translated into English and sent to Mr. Ecclestone's legal team. The team has until mid-August to submit a response to the court, which will then decide whether to proceed with the case. The soonest a trial could begin is September.

Bernie Ecclestone’s position at the top of the sport he has governed for almost four decades appeared to be critically threatened on Thursday night, after he stepped down from Formula One’s management board following his indictment on bribery charges in Germany.
Although the billionaire businessman will continue to run Formula One on a “day-to-day basis”, he will be subject to increased oversight and will no longer have the authority to approve and sign “significant contracts”.
Prosecutors in Munich announced that Ecclestone is to stand trial at the end of April on claims he bribed a German banker, Gerhard Gribkowsky, over the sale of the sport in 2006.
Ecclestone has always insisted he is innocent and that he did not bribe Gribkowsky, who was chief risk officer from BayernLB, and has already been jailed for his part in the affair, but the development will prompt the sport’s management to begin considering potential alternatives to the 83-year-old, who now faces legal action on three fronts.
After a meeting on Thursday to discuss the court proceedings against Ecclestone, the holding company of the Formula One Group said in a statement: “The board of Delta Topco Limited has met today to discuss the decision of the Munich Court to commence proceedings against Mr Ecclestone. The board believes that it is in the best interests of both the F1 business and the sport that Mr Ecclestone should continue to run the business on a day-to-day basis, but subject to increased monitoring and control by the board. Mr Ecclestone has agreed to these arrangements.

“The approval and signing of significant contracts and other material business arrangements shall now be the responsibility of the chairman, Peter Brabeck-Letmathe, and deputy chairman, Donald Mackenzie.”
Mackenzie, a co-founder of CVC Capital Partners, Formula One’s main shareholder, said last November that if Ecclestone was found to have “done anything that is criminally wrong, we would fire him”.
Ecclestone assured the board on Thursday that he is “innocent of the charges” and will “vigorously defend the case” when it goes to court.
The Formula One supremo faces charges of bribery and incitement to breach of trust with a $44 million payment to Gribkowsky. Bribery convictions in Germany can result in prison sentences of three months to 10 years.
Ecclestone’s lawyers in Germany, Sven Thomas and Norbert Scharf, said on Thursday that “the alleged bribery did not happen”.
“The accusations in the indictment based on Gribkowsky’s statement are unfounded and do not… add up to a coherent picture,” they added.
The German banker was convicted in 2012 of taking the payment from Ecclestone in connection with the undervaluation and sale of a 47 per cent stake in Formula One to CVC in 2006. He was sentenced to 8½ years in prison for corruption, tax evasion and breach of trust.
In separate legal proceedings in London’s High Court, Ecclestone admitted in November that he made the payments to Gribkowsky between July 2006 and December 2007 because he was effectively the victim of blackmail, and wanted to avoid being reported to UK authorities over his tax affairs.
He said he had been “shaken down” by Gribkowsky, adding: “I made up my mind he needed to be kept quiet.”
German media company Constantin Medien – a former shareholder in the sport – is suing Ecclestone for up to $144 million, claiming Formula One was undervalued by the BayernLB deal.
Judgment is expected at the end of this month, but Ecclestone is also facing action in the United States, where a private equity firm, Bluewaters Communications Holdings, has filed a $650 million lawsuit. Bluewaters says it should have been sold BayernLB’s stake as it had offered “10 per cent above any genuine bona fide offer put forward by any other competing buyer”.
Red Bull team boss Christian Horner, who has been touted as a potential successor to Ecclestone, said earlier this week before the court’s decision that despite his legal troubles Ecclestone remained “the only guy” to run the sport.
Ferrari president Luca di Montezemolo has previously suggested that a change would be needed if German prosecutors acted.

Bernie Ecclestone walked out of court on Tuesday with the corruption scandal that threatened to end his F1 reign and leave him in jail effectively over.

If he is able to get $100 million together within a week, all charges will be dropped.

"Yes," 83-year-old Ecclestone told the judge when asked if he can meet the deadline.

"Thank you very much, I will honor my commitments," he added.

The financial settlement was agreed last Friday between the British billionaire, his lawyers and state prosecutors, and on Tuesday the judge in the bribery trial accepted it.

"The proceedings will be temporarily suspended with the agreement of the prosecution and the accused," judge Peter Noll said.

$99 million will go into the Bavaria state's coffers, and $1 million to a children's charity.

Prosecutors said they agreed to the deal due to Ecclestone's "advanced age" and "other extenuating circumstances".

And the judge said the arrangement was made because the trial so far had not supported "the suspicion in major parts, and more evidence-taking isn't likely to yield other results".

Ecclestone's lawyers insisted in a statement that Tuesday's outcome is not a "deal nor a settlement, even less so a 'buying out'."

Rather, it shows that a "conviction of Mr Ecclestone could not be expected with any likelihood".

The fact that a corruption saga ends with a history-making payment to the court, however, is obviously highly controversial, particularly with companies like Mercedes parent Daimler operating under strict compliance rules.

Daimler president Dieter Zetsche had said on Sunday: "If someone is acquitted in court, does not go to jail and can continue working, I welcome that.

"This applies to Bernie Ecclestone especially, with the great contributions he has made to formula one."

Zetsche added that despite his advancing age, Ecclestone can play "a decisive role in formula one into the future," he told Bild am Sonntag newspaper.

A magazine in Brazil is reporting that Formula 1 boss Bernie Ecclestone’s mother-in-law was kidnapped in Sao Paolo on Friday and is currently being held for a ransom of about $36 million (120 million Brazilian Reals).

Veja magazine claims it is the largest ransom demand in the country’s history. The 85-year-old Ecclestone is reportedly worth in excess of $3 billion.

According to the Daily Mail, the kidnappers are in contact with the Ecclestone family.

Aparecida Schunk, 67, is the mother of Fabiana Flosi, Ecclestone’s third wife. The couple met in 2009 and were wed in 2012.

This incident is only the latest in a recent string of horrors leading up to the Olympics in Rio as athletes make their way to the city. Jiu-jitsu athlete Jason Lee claimed he was kidnapped by Brazilian “cops” on Saturday and forced to hand over a large sum of cash.

As Brazil prepares for thousands of visitors, the police has created a division especially designed to combat kidnappings. Concerns over safety, however, could discourage many wealthy fans from traveling to Rio and send the country’s economy into further turmoil after it spent billions of dollars to host the event..

The mother-in-law of Formula 1 chief Bernie Ecclestone was rescued by Brazilian cops Sunday after being kidnapped more than a week ago.

Members of the elite Sao Paulo anti-kidnapping division saved Aparecida Schunk — the 67-year-old mother of Ecclestone’s third wife, Fabiana Flosi — following a daring raid according to the Daily Mirror.

She was found in a building unharmed as officers arrested two suspects.

Schunk’s captors had demanded that a ransom of about $36 million be paid in exchange for her freedom, but Brazilian news outlets reported that not a dime was paid.

It was the largest ransom demand in the country’s history.