Bloomberg News

BayernLB Saw CVC’s F-1 Offer as ‘Very Attractive,’ Witness Says

November 02, 2011

Oct. 28 (Bloomberg) -- Bayerische Landesbank’s management board saw an offer by CVC Capital Partners Ltd. for the bank’s stake in the Formula One racing series as “significantly more than we had hoped,” a former board member said.

“BayernLB’s management board regarded the net proceeds from the sale of the Formula One stake to CVC as very attractive,” former BayernLB management board member Dieter Burgmer told a Munich court today.

Burgmer testified at the trial of Gerhard Gribkowsky, a former chief risk officer of Munich-based BayernLB, charged in July with accepting bribes, breach of trust and tax evasion. Prosecutors claim he received $44 million in bribes to facilitate the 2005 sale of the bank’s 47 percent stake in Formula One to CVC.

“The management board was not aware of any extra bonus payments to any of its members related to the sale of the Formula One stake,” Burgmer said. “As far as I know, Gribkowsky didn’t get an extra payment and I don’t know if he asked for one.”

Presiding Judge Peter Noll read a letter today in which Gribkowsky asked Werner Schmidt, then BayernLB’s chief executive officer, for a bonus should the sale of the Formula One stake succeed. He suggested 1 percent to 1.5 percent of the sale price, depending on the total amount, according to the letter that was confidentially addressed to Schmidt. BayernLB’s share was sold for 840 million euros ($1.16 billion).

2002 Bankruptcy

The trial in Munich is scheduled to feature testimony from Formula One Chief Executive Officer Bernie Ecclestone, who is also being investigated. The criminal trial is one of several court cases stemming from the transaction in Germany and England. BayernLB received the Formula One stake as collateral during the 2002 bankruptcy of Leo Kirch’s media group.

Ecclestone wanted to push BayernLB out and saw a chance when CVC showed interest, prosecutors said in the indictment. Ecclestone and Gribkowsky agreed on a plan that funneled $44 million to Gribkowsky through sham contracts and off-shore companies, according to prosecutors. Gribkowsky then single- handedly negotiated the purchase without seeking other bids, prosecutors said.

Gribkowsky’s lawyer Rainer Bruessow has said the allegations will collapse. CVC had no knowledge of any payment to Gribkowsky, the company said in an e-mailed statement last week. Ecclestone, who has denied any wrongdoing, is scheduled to testify at the trial on Nov. 9 and 10.

--With assistance from Karin Matussek in Berlin. Editors: Heather Smith, Christopher Scinta

To contact the reporter on this story: Oliver Suess in Munich at

To contact the editors responsible for this story: Frank Connelly at; Edward Evans at

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