Did Bernie lie?

[donskar]

Bernie and Enzo have one thing in common: like Enzo, Bernie could be called a great man. He is certainly not a good man.

[WhiteBlue]

http://www.autoweek.com/article/20121121/F1/121129974

BayernLB last month claimed that the shares had actually been worth approximately $1.1 billion, and formally demanded compensation from Ecclestone amounting to $400 million, including the commission that he was paid.
In a connected civil case pending in the London High Court, a German media company is preparing allegations to the effect that the shares were undervalued deliberately in order to prevent it from receiving a substantial commission. Constantin Media claims that it had a right to claim 10 percent of the value if the shares were sold for more than $1 billion.
Now a German news magazine, Focus, claims that since the trial, the Munich prosecutor's office has failed in an attempt to broker a deal with Ecclestone whereby he would settle in full with BayernLB, in return for a suspended sentence on a charge of making the alleged “bribe.”
In response, Steinkraus-Koch declined to deny that such a deal had been suggested, and said that no decision has been made as to whether 82-year-old Ecclestone will be charged.

I think that a lot hinges on the Bluewater trial. If they win their case in New York the London High Court will also take that as a strong lead to approve the Constantine media claim. So that would be $ 0.8bn gone to just satisfy the side claims. To get the prosecution off his back Bernie would have to agree to the $400m deal Focus is talking about. This would probably cost him the job with CVC because they would not be able to employ a CEO with a criminal record. So all eyes are at the USA for the outcome of that trial.

[bhall]

Ecclestone is not the CEO of CVC Capital Partners. His position is with Formula One Group, which is privately owned by Ecclestone and CVC Capital Partners, which is a private company itself. That means they can employ whoever they want, however they want, whenever they want. (In other words, please stop making --- up.)

If Ecclestone is removed from his position, it's only likely to happen after he's incarcerated for something. Otherwise, I doubt he'll fire himself.

[WhiteBlue]

Ecclestone is not the CEO of CVC Capital Partners. His position is with Formula One Group, which is privately owned by Ecclestone and CVC Capital Partners, which is a private company itself. That means they can employ whoever they want, however they want, whenever they want. (In other words, please stop making --- up.)

I havn't said he is CEO of CVC. I said CVC would find his position as CEO (of FOM) untenable. I'm not alone in this opinion. CVC is the controlling share holder of FOM. They are holding massive private capital which is mainly put up by US pension funds. They are likely to pay very close attention to the public opinion in the USA. If Bernie looses the law suit against Bluewater and a US court effectively confirms Mr. Griebkowskies claims of bribery he will very likely loose his job. That is my considered opinion. You are invited to have your own but it would be appreciated if you could express it a bit more politely.

[phillippe]

While CVC may be a controlling shareholder, in ventures of these kinds, it is highly unlikely that the minority shareholder (Bernie) would not have affirmative voting rights over an extensive set of matters, including over his own appointment or removal as CEO. Affirmative voting rights mean that despite having majority voting power, decisions in respect of those matters over which the minority shareholder has affirmative voting rights, cannot be taken without the consent of the minority shareholder. Given Bernie's track record, it is inconceivable that he got into bed with CVC without these super blue pills. So, it is highly unlikely that Bernie will go at least on account of pressure from CVC or its investors.

[bhall]

Exactly. And as a private equity firm, CVC is largely immune from outside pressure anyway due to the very nature of their business (buyouts) being an incredibly unpopular one. If anyone loudly objects to Ecclestone's situation, it surely won't mark the first time CVC has had to deal with bad PR.

[Hail22]

It will only be a matter of time before he is shown a pair of stainless steel cuffs to go with his billion dollar lifestyle.

[WhiteBlue]

As I have said it is a matter of opinion. We do not know the terms of the contract between CVC and Ecclestone. There would be a strong desire to keep the man because he obviously has an immaculate track record of growing the business and making money for it. On the other hand I believe that a criminal conviction would disqualify Ecclestone in the view of many important people. He could be banned from travelling in various countries and that would be very bad for his ability to make deals. Even worse people with money who would want to sponsor F1 and manufacturers - like Mercedes - or CEOs of world class brands would not be able to deal with him.

[WhiteBlue]

http://paddocktalk.com/news/html/story-211204.html

The Suddeutsche Zeitung said there are "detailed preparations" being made to potentially replace the 82-year-old Briton, if Munich prosecutors decide to charge him with corruption over the Gerhard Gribkowsky bribery scandal. The report said Delta Topco, the Formula One Group's majority CVC-owned holding company, is considering stepping Ecclestone down and replacing him with an interim chief executive if "as expected" he is charged in the coming weeks.

So I guess it is all a matter of how the Bluewater trial goes ahead.

[WhiteBlue]

Exactly. And as a private equity firm, CVC is largely immune from outside pressure anyway due to the very nature of their business (buyouts) being an incredibly unpopular one. If anyone loudly objects to Ecclestone's situation, it surely won't mark the first time CVC has had to deal with bad PR.

Autoweek reported a different take on that view.

CVC has stood by Ecclestone but it is understood that it would be forced to replace him if he is prosecuted. In case this happens, CVC has engaged headhunter firm Egon Zehnder to identify potential replacements for Ecclestone from the top of large global businesses.

[WhiteBlue]

...As a private equity firm, CVC is largely immune from outside pressure anyway due to the very nature of their business (buyouts) being an incredibly unpopular one....

Source:

Mr Ecclestone says CVC “will probably be forced to get rid of me if the Germans come after me. It’s pretty obvious, if I’m locked up”.

So first Montezemolo asks for Ecclestone's resignation and now Bernie admits that he will be dropped by CVC if he is charged in Germany. I think the charge is only a question of time if the the trial in the US goes against him. The charge is that he manipulated the sale to a lower bidder, which is the core of issue from day one.

[Absolutelee]

So if he is found guilty, is there some sort of retroactive price correction? Will he have to pay the previous owners the difference to whatever the fair price of the time should have been...what about everything that that deal allowed him to do because of his new position and with the money he saved. That stuff cannot be undone.

[WhiteBlue]

Facts are facts and can't be undone. But the implication to a US trial victory would be a damage claim against CVC and prosecution in Germany against Bernie Ecclestone for bribery. If that happens CVC would obviously drop Bernie and find someone else to run F1.

[Hail22]

Clocks Ticking?

http://en.espnf1.com/f1/motorsport/story/98052.html

[iotar__]

This is a lesson in how modern world works You can pull off the biggest scam in sport (selling F1 rights), constantly ruin the sporting part, hire and fire F1 team managers (Parr, Lauda), lie (Bahrain), cheat and steal, come up with the most nonsensical ideas like medal system. No one cares.

You can be above the law in all those instances but try denying banks their share of the profit and legal system is immediately (well not quite immediately) on your back. Watch and learn kids, don't mess with bankers.