Munich, Germany - Formula One boss Bernie Ecclestone persuaded private equity fund CVC to double its initial valuation when it was buying a stake in the motor racing business, CVC's co-chairman told a German court on Wednesday.
Ecclestone, 83, is on trial for bribery, accused of channelling $44 million to a German banker in return for smoothing the sale to CVC which became the largest shareholder in Formula One in 2006.
Ecclestone, who denies wrongdoing, could face up to 10 years in prison if found guilty and a conviction would end his long grip on a business he helped to create. The prosecution alleges that Ecclestone wanted CVC to take control as it meant he could stay on as chief executive.
CVC's Donald Mackenzie said that Ecclestone had driven a hard bargain and not demanded any guarantees about his role.
“At no point did he ever say that he expected that he would remain chief executive,” Mackenzie told the court, his words translated into German by an interpreter.
Ecclestone had laughed off Mackenzie's initial $1 billion valuation for Formula One, he added.
“He wrote something on a small piece of paper which he pushed across the table. On this piece of paper was the figure two billion dollars,” added Mackenzie.
That was the broad valuation on which CVC acquired a 47 percent stake in the business from German bank BayernLB .
CVC remains the largest shareholder in Formula One and Mackenzie has said he would fire Ecclestone if he was found guilty of wrongdoing.
The case is being heard on only a couple of days each week to fit around Ecclestone's commitments in running Formula One, a globe-trotting business with annual turnover of more than $1.5 billion. It is expected to run at least until October and Ecclestone has to attend every session .
Ecclestone is accused of bribing jailed former BayernLB chief risk officer Gerhard Gribkowsky to facilitate the CVC deal.
Ecclestone admits making multi-million dollar payments to Gribkowsky but says this was to silence the German, who he said was threatening to make false claims about his tax status that could have jeopardised his fortune.
Ecclestone's lawyers were due to cross-examine Gribkowsky at the end of July but judge Peter Noll postponed that hearing until September when he revised the schedule on Wednesday.
The Munich court jailed Gribkowsky for 8-1/2 years in 2012 for corruption over the payments from Ecclestone
Reuters