Bloomberg News

Gribkowsky Made Surprise Request for F-1 Sale Fees, Witness Says

December 07, 2011

Dec. 7 (Bloomberg) -- Gerhard Gribkowsky, a former Bayerische Landesbank’s management board member, made a last minute request for extra fees in the 2005 sale of the lender’s stake in the Formula One racing series, a witness said at Gribkowsky’s fraud trial.

Gribkowsky, who was responsible for the lender’s investment in the series, sought two extra payments as a “surprise and at the last minute” during the 840 million-euro ($1.1 billion) sale of BayernLB’s 47 percent Formula One stake to CVC Capital Partners Ltd., Alexandra Irrgang, who worked on BayernLB’s team overseeing the stake, told a court in Munich today.

Gribkowsky is being tried on charges he received $44 million in bribes to facilitate the sale. Formula One Chief Executive Officer Bernie Ecclestone, who is also being investigated, had wanted Munich-based BayernLB to sell the stake to private equity firm CVC, prosecutors said in the indictment.

Gribkowsky, the lender’s former chief risk officer, told BayernLB’s management board that a failure to agree to the payments might be a deal breaker.

The bank thought “the CVC offer was too good to be true and we expected problems to surface at some point,” she said.

BayernLB’s management board didn’t inform the lender’s supervisory board about the “high fees included in the sales agreement,” Kurt Faltlhauser, the former supervisory board head, told the court last month.

While BayernLB held the Formula One stake, “Ecclestone wore us down in an extreme manner,” Irrgang said.

No ‘Alternative’

Ecclestone testified last month that he believed he had no “alternative” to making payments to Gribkowsky as he feared that the banker might disclose information to U.K. tax authorities about the Bambino trust controlled by his then wife that might be “very expensive” for him as he would have to provide evidence that he wasn’t in control of the trust.

The Bambino trust has told the court the $25 million transactions -- payments to four racing teams -- went to compensate valid claims and were legitimate, Gribkowsky’s lawyer Rainer Bruessow has said, adding that the allegations will collapse.

CVC had no knowledge of any payment to Gribkowsky, the company has said.

--Editors: Anthony Aarons, Christopher Scinta

To contact the reporter on this story: Oliver Suess in Munich at osuess@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net Edward Evans at eevans3@bloomberg.net


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