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Expat Formula One boss linked to Swiss probe

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Expat Formula One boss linked to Swiss probe
Bernie Ecclestone. Photo: Ryan Bayona/flickr
18:52 CET+01:00
Swiss prosecutors are probing claims of corruption linked to Formula One boss Bernie Ecclestone over the sale of a stake in the multi-billion-dollar business.

"The Geneva prosecutor's office has opened an investigation following a complaint by the company Constantin Medien," spokesman Henri Della Casa told AFP on Tuesday.
   
Della Casa declined to name Ecclestone directly, but confirmed the accuracy of various media reports which said the Formula One chief was the target of the investigation.

Ecclestone, 82, owns a luxury chalet in Gstaad, the upscale mountain resort in the canton of Bern.

The British billionaire is president and CEO of Formula One Management and Formula One Administration who, through his companies, manages the administration and operation of Formula One motor racing around the world.

Constantin Medien, a German media group, alleges it was the victim of an undervaluation in the 2006 sale of a controlling stake in Formula One to private equity group CVC Capital Partners.
   
The bulk of the deal involved the sale of stakes owned by German state bank 
BayernLB and Ecclestone's Swiss-based family trust, Bambino.
   
Constantin Medien, which owned an interest in Formula One via 
BayernLB — holder of 47 percent of the stock — alleges that the $820-million price tag paid by CVC was intentionally undervalued.

Within months of the deal, the value of CVC's stake had reportedly jumped to $2.8 billion, making it one of the most profitable deals in the private equity group's history.
   
The decision to open a probe in no way implies any wrongdoing on Swiss 
soil, Della Casa underlined.
   
"The goal is to establish whether the facts constitute an offence under 
Swiss criminal law," he said.
   
In July, prosecutors in the southern German city of Munich charged 
Ecclestone in relation to a $44 million payment he made to German banker Gerhard Gribowsky, raising the spectre of a prison term for the Formula One chief.
   
Gribowsky, who in August was sentenced by a German court to 
eight-and-a-half years in jail, worked on the 2006 sale.
   
Last month, Munich prosecutors delayed setting a date for Ecclestone's 
bribery trial until next year, saying that they did not want to act too hastily.
   
Ecclestone has always denied bribing Gribowsky to avoid a British tax 
inquiry into the Formula One sale, claiming he was blackmailed by the German.
   
A separate trial against Ecclestone meanwhile began in London on 
Tuesday, with a lawyer representing Constantin Medien telling the High Court that the Formula One chief made a "corrupt bargain" with a banker to facilitate the sale of the Formula One group to a buyer "chosen" by him.

Ecclestone, who did not appear in the court, says Constantin's claim "lacks any merit" and denies any "conspiracy".

The Briton does not deny paying Gribkowsky but has insisted he was the victim of a blackmail plot by the German.

Ecclestone controls about a five-percent stake in Formula One, which he has cannily built into an empire with annual revenues of about $1.5 billion.

The legal wrangling has cast a shadow over renewed plans to float Formula One which were already put on hold last year due to rocky markets.

CVC is reportedly seeking a valuation of more than $10 billion when the flotation finally goes ahead.

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