August 18, 2011 7:13 pm

Media group sues over F1 series sale to CVC

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A German media group has filed a multi-million dollar lawsuit against Bernie Ecclestone and several other defendants, presenting the billionaire Formula 1 boss with another legal challenge over the controversial sale of the racing series almost six years ago.

Constantin Medien, a previous part-owner of F1, alleges in its London lawsuit that Mr Ecclestone and his business partners undervalued the racing series when it was sold by banks for $1.7bn to private equity group CVC Capital Partners in late 2005, two people familiar with the claim said.

In the lawsuit filed at the London High Court last month, Constantin alleged that the defendants, by selling one of the world’s most popular racing championships too cheaply, thereby deprived the German group of its share of profits from a sale.

The dispute has its roots in an agreement that was made at the time of the collapse of the German Kirch media empire, of which Constantin – then named EM.TV– had been part of.

Constantin had given its minority stake in F1 as collateral to the banks in exchange for an agreement guaranteeing it a share of profits in a future sale of the racing series.

Last month’s claim pits Constantin against Mr Ecclestone; his then lawyer Stephen Mullens; Bambino Holdings, a trust of the Ecclestone family; and Gerhard Gribkowsky, a former banker Germany’s BayernLB, who has been in custody since his arrest in January. Mr Gribkowsky has been charged recently by German prosecutors with corruption, tax evasion and breach of trust.

Prosecutors allege he was paid a bribe by Mr Ecclestone in the wake of CVC’s deal, orchestrated by Mr Gribkowsky, to buy a majority stake in F1 from a group of banks, including BayernLB.

German prosecutors are also investigating Mr Ecclestone and several of his lawyers over the $44m in payments the F1 boss has made to Mr Gribkowsky.

Mr Ecclestone has admitted making payments to Mr Gribkowsky, but he has denied that they were a bribe. The F1 chief executive’s office on Thursday said he was travelling and unavailable for comment.

Keith Oliver of Peters & Peters, the law firm representing Constantin Medien, declined to comment, as did the German media and marketing company and BayernLB.

Constantin Medien suffered from expensive acquisitions when the dotcom bubble collapsed and had to be rescued by the Kirch media group.

The subsequent collapse of Kirch’s empire led to BayernLB and two other banks acquiring a stake in F1, since shares in the motorsport’s holding company had been pledged to the banks as collateral.

Additional reporting by Roger Blitz

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