Bernie Ecclestone was accused of repeatedly lying during evidence to the High Court in a $140m damages claim, after the motorsport supremo denied knowledge of a $235m loan that was key to the sale of Formula One to private equity group CVC.
The loan got in the way of CVC’s completing its takeover of F1 in 2005/06 because it was being called in by its owner, a Swiss fund that had bought up the debts of previous F1 owner Kirch media group when it went bankrupt.
Completion of the sale to CVC was dependent on the signing of a 100-year agreement with the motorsport governing body, Federation Internationale de l’Automobile. The loan had to be bought by a F1 holding company to help towards a $313m rights deal with the FIA.
Repeatedly asked about what he knew about the loan by Philip Marshall QC, for plaintiffs Constantin Medien, Mr Ecclestone said he was not aware of it.
But Mr Marshall produced documentary evidence which suggested Mr Ecclestone was deeply involved in trying to buy a $235m portion of the loan.
Mr Marshall said: “You are personally doing some negotiating on it. You are making offers.”
After Mr Ecclestone again said he was unaware of the loan, Mr Marshall said: “You’re just lying about this, you have been lying about this repeatedly this afternoon.”
Mr Ecclestone responded: “I have a detailed knowledge as of two months ago of what I was told of subsequently what happened. I would advise you not to get involved in that.”
In its claim against Mr Ecclestone and three other parties, German media group Constantin Medien claims F1 was undervalued when BayernLB sold its 47 per cent stake to CVC in 2005/06, which affected its own proceeds from the sale.
It emerged during Mr Ecclestone’s third day of evidence to the High Court that he called the then Royal Bank of Scotland chief executive Fred Goodwin to curry support for CVC’s purchase of a stake in F1.
Recalling the conversation in 2005, Mr Ecclestone told the court he remembered saying: “Fred, these people need some help to buy the company.” He said he recalled the amount the bank would need to lend was “well over 500m [dollars]”.
CVC borrowed from RBS and Lehman Brothers to finance its overall purchase of F1.
The court heard evidence suggesting the F1 chief executive brushed off overtures from other potential buyers, including Rothschild Group and Hutchison Whampoa for BayernLB’s 47 per cent stake, preferring the CVC approach.
Mr Marshall said Mr Ecclestone spoke several times to Gerhard Gribkowsky, former chief risk officer for BayernLB, asking him to come to the Belgian Grand Prix in Spa where CVC co-founder Donald MacKenzie would be present.
Mr Ecclestone agreed with Mr Marshall that he had offered to fly Mr Gribkowsky to and from Spa in his private jet. “It became clear that CVC was the buyer you wanted,” said Mr Marshall.
Constantin claims that Mr Ecclestone and Mr Gribkowsky were engaged in a “corrupt bargain” to sell the bank’s stake at below its true value.
At various points during his evidence, Mr Ecclestone became testy with Mr Marshall’s cross-examination. He said: “You’ve had months to look at all of this. I’ve been very busy, spent many hours in planes. I don’t care if this takes until the end of the year. I will look at everything now.”
He then told Judge Newey: “I’d like an opportunity to read through these things before answering. I thought this would be finished yesterday, which was why I was in a hurry.”
Mr Marshall said Mr Ecclestone was set upon ending banking involvement in the ownership of F1 and “to carry on running the business as before”.
Mr Ecclestone said: “I was running the company the way I thought it should have been run.”
Asked about a discussion with Mr Gribkowsky on corporate governance, he replied: “I’ve never been interested in corporate governance and I’m not today either.”
Mr Gribkowsky was jailed last year on bribery charges for accepting the payments of $44m paid from Mr Ecclestone and Bambino, an Ecclestone family trust.
The case continues.