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Banker arrested on bribery charges (merged)


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#251 wrighty

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Posted 26 December 2011 - 13:53

i did notice this story in the Telegraph on the 23rd (tried to link it but my phone wasn't helpful enough lol) which confirms that Bernie admits to diverting payments to Grigkowsky via various third parties 'to hide their origin' after a judge had ruled that Bernie's payments were bonafide bribes

Edited by wrighty, 26 December 2011 - 13:54.


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#252 WhiteBlue

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Posted 26 December 2011 - 15:06

But is the bribe connected to the sale? I thought it was over tax stuff and that the banks said the fee F1 was sold for was fair.


I have firmly believed and continue to believe that the bribe wasn't primarily paid to undervalue the deal. The bribe was paid because CVC agreed to Bernies conditions that he would continue to run the show and he alone. If you would have openly auctioned the business you would have a strong chance that strategic and financial investors could have shown up for the deal. Bernie had a very strong interest to get the business into the hands of a financial investor. A strategic buyer like Murdoch or another huge global media corporation would have questioned his total power over F1. He might have kept the day to day control, but he would have been on a much shorter leash over the years. The $44m from his and his relatives pockets were probably very wisely spend considering that they probably bought him total control for almost a decade. And it does not stop there. He got a huge cash injection for the sale of the advertising and catering business and the other half of the TV and race fee business. A strategic investor might have bought just the majority. Bernie had several very good reasons to see $44m as a small sales tax or "usefull expenditure". This is double true as he recouped the money from the bank. This might be the downfall for Gribkowsky because he definitely "stole" that money from his employer.


Even Bernie isn't so magical to have a profit equal to his turnover.

The difference is not substantial. He pays no taxes and the whole business is run with around 100 employees. The big earners are share holders and not salaried employees.


#253 RedOne

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Posted 26 December 2011 - 15:59

All I want is a verdict - Will Bernie burn for this or not? All bussiness' involving such large amounts of money are bound to be a little shady.

#254 Concorde

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Posted 26 December 2011 - 17:20

I have firmly believed and continue to believe that the bribe wasn't primarily paid to undervalue the deal. The bribe was paid because CVC agreed to Bernies conditions that he would continue to run the show and he alone. If you would have openly auctioned the business you would have a strong chance that strategic and financial investors could have shown up for the deal. Bernie had a very strong interest to get the business into the hands of a financial investor. A strategic buyer like Murdoch or another huge global media corporation would have questioned his total power over F1.

Like you I don't believe the money was paid for undervaluing the deal either, various people in the know seem to agree to that.
Your theory on the conditions could be on the mark, iirc Bernie and the 3 banks (then lead by the Bayrische with Gribkowsky) settled out of court on a dispute they had over the control of F1 in 2005. Could be that (part of) the payment was for Gribkowsky to do what Bernie wanted and let him keep his control over the sport.

Me, I think Gribkowsky was a major headache for Bernie back then and that he brokered a nice deal for himself that lead to Bernie paying. The payment consisting of some legitimate fees for consultancy, some money to be cooperative in the deal and some money he indeed sort of "extorted" from Bernie regarding his involvement in his trust. How illegal Bernie's role in all this was remains to be seen but sure is that's all very difficult to prove and can be drawn out in the courts for ages.

All I want is a verdict - Will Bernie burn for this or not? All bussiness' involving such large amounts of money are bound to be a little shady.

Nah Bernie won't burn, tops he might be out of pocket a few millions in the end but that's really nothing to him.



#255 MustangSally

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Posted 06 January 2012 - 05:37

I have firmly believed and continue to believe that the bribe wasn't primarily paid to undervalue the deal.


That was indeed the original allegation, but I'm not sure whether it makes any difference to the charges. As I understand it, BayernLB has to prove that the monies paid to Gribkowsky were related to the sale - for whatever reason.

Ecclestone maintains that Gribkowsky was paid off for some entirely unrelated purpose.

Now, if Ecclestone is believed by the court, I'm not sure the bank has a case. Ecclestone's commission was signed off by the bank and above board. If Bernie then chose to spend it on some hush money, that was his choice.

Presumably, the court could still rule that it was a 'corrupt payment' . . . but if not one in connection with the sale, the bank has no claim upon it.

Interesting case. Gribkowsky was indeed a real thorn in Ecclestone's side - he sued Ecclestone twice. So Bernie's testimony is not without rationale.



#256 TriumphST

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Posted 09 January 2012 - 15:03

That was indeed the original allegation, but I'm not sure whether it makes any difference to the charges. As I understand it, BayernLB has to prove that the monies paid to Gribkowsky were related to the sale - for whatever reason.

Ecclestone maintains that Gribkowsky was paid off for some entirely unrelated purpose.

Now, if Ecclestone is believed by the court, I'm not sure the bank has a case. Ecclestone's commission was signed off by the bank and above board. If Bernie then chose to spend it on some hush money, that was his choice.

Presumably, the court could still rule that it was a 'corrupt payment' . . . but if not one in connection with the sale, the bank has no claim upon it.

Interesting case. Gribkowsky was indeed a real thorn in Ecclestone's side - he sued Ecclestone twice. So Bernie's testimony is not without rationale.


In fairness, Gribkowsky must prove a legitimate source for the millions and pay tax on them, reticence only suggests malfeasance and enough to prove the Prosecutors case. Ecclestone refutes Gribkowsky's suggestion of consultancy work saying the reason was blackmail but not blackmail (Good for anyone who understands the subtle difference, I don't). But there again he lied about making any payments whatever to Gribkowsky, leastways until the court traced the source back to him. Neither can admit corruption because of the ramifications but neither can prove their version of events.

And that should be enough to be found guilty.

The German Prosecutor is winning this one hands down at the moment and are questioning Donald MacKenzie today, don't expect any of these involved to roll over, there's too much at stake but unless they can provide a plausible explanation for the under the counter payments their denials will fall on deaf ears

You postulate if Ecclestone "is to be believed in court" well there is a first time for everything, read Justice Longmore's comments on previous Ecclestone testimony under oath, he stated he'd not believe anything Ecclestone said unless corroborated by independent supporting evidence.

Interesting theories as to why the monies was paid to Grigkowsky, well neither he nor Ecclestone can agree as to why it was paid and CVC maintain it had no knowledge of any payment, its most likely they were all involved. What's difficult to ignore and supported by the action taken by Constantin Medien is the commercial rights was seriously undervalued. That view is also supported by the investment yield F1 produces.

So it seems only the recipients of this golden goose, CVC, Ecclestone et al, maintain it was fairly priced, well they would say that but the figures tell quite a different story.

Edited by TriumphST, 09 January 2012 - 16:38.


#257 The Ragged Edge

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Posted 09 January 2012 - 15:21

This is such an open and shut case, I can only hazzard a guess that some people are defending Bernie, in order to sharpen up their devils advocates skills.

#258 Concorde

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Posted 09 January 2012 - 15:26

Today CVC's Donald Mackenzie in court, stating that he knew nothing about the Gribkowsky payments but that when he asked Bernie about it he was told the same story that it was to do with Gribkowsky shaking him down.

Furthermore he confirmed that although he didn't know about them then that the payments (commission) to Ecclestone in this deal were quite common.

Last sentence of the article:
"Gribkowsky does what he has done since October 24th when the trial started, he keeps quiet and smiles" :lol:

http://www.manager-m...0.html?#ref=rss

#259 wrighty

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Posted 09 January 2012 - 15:41

....just to fill in some of the information for people curious about the 'back-story' to this case, here's an article in The Economist from 2000 which details the story specifically with regard to the transition of tv rights and the associated costs from FiA to one Bernard Charles Ecclestone esq. and here's their more recent follow-up preview to the court case

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#260 jjcale

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Posted 29 January 2012 - 13:03

Where has this reached now (sorry ...not been following closely for a couple of months ... but have read the thread)... nothing seems to have happened for a couple of weeks ... is the trial over?

Germany has got really serious about anti-corruption .... even "normal" corporate stuff is getting cracked down on .... Bernie's luck may have run out just by virtue of the location where all this is taking place ... but he's had such an amazing run so far that its hard for me to think that this time its gonna be different.

#261 MustangSally

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Posted 30 January 2012 - 00:02

Germany has got really serious about anti-corruption .... even "normal" corporate stuff is getting cracked down on ....


In a way. There is a subtext to this case.

Bayern LB lost billions and were bailed out by German taxpayers. It was a really naughty bank. It is very convenient for them to paint F1 people as the bad guys. 50m is nothing compared to the 20 odd billion needed to bail Bayern. And notice that all the sub prime junk is not being investigated at all and so far and Gribkowsky is the only director in the dock.

Personally, I don't believe the shares were undervalued. Bernie wouldn't have undersold the Bambino shareholding. Gribkowsky intervened at a time when the FOTA split was looming. I think Bernie bribed Gribkowski to come onside.


#262 jjcale

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Posted 30 January 2012 - 18:41

In a way. There is a subtext to this case.

Bayern LB lost billions and were bailed out by German taxpayers. It was a really naughty bank. It is very convenient for them to paint F1 people as the bad guys. 50m is nothing compared to the 20 odd billion needed to bail Bayern. And notice that all the sub prime junk is not being investigated at all and so far and Gribkowsky is the only director in the dock.

....


Good decent businesses in germany are being investigated for things that are nothing at all IMO .... ever since siemens the authorities there have gone a little crazy IMO.... the banks are in their own world. That there have been hardly any investigations/prosecutions anywhere in the world in simply astounding ... which is all the more reason why the minor crooks in F1 might be sacrified.


#263 TriumphST

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Posted 31 January 2012 - 21:07

Good decent businesses in germany are being investigated for things that are nothing at all IMO .... ever since siemens the authorities there have gone a little crazy IMO.... the banks are in their own world. That there have been hardly any investigations/prosecutions anywhere in the world in simply astounding ... which is all the more reason why the minor crooks in F1 might be sacrified.



The reality is mainstream bankers while their actions were incompetence personified were rarely criminal nor were their actions to the best of my knowledge for their own benefit, unless you include retention of their well paid jobs or bonuses.

F1 is very different, Gribkowsky is alleged to have undervalued BayernLB's stake by over $1b according to Constantin Medien and of taken a bribe from Ecclestone to do so, that was criminal not incompetence and why the German Prosecutors take it so seriously.



Edit 9th Feb:
jjcale.... "Where has this reached now (sorry ...not been following closely for a couple of months ... but have read the thread)... nothing seems to have happened for a couple of weeks ... is the trial over?"

Apparently the trial has re-convened on the 6th Feb after a fortnight's break to the news that it may go on till April. There is wholesale recalling of witnesses as a consequence of Gribkowsky's continued silence, one witness has been recalled three times apparently. Ecclestone has also been cited as one of those to be recalled, Judges permitting. Perhaps the court isn't tired of hearing Ecclestone's fairy stories just yet.

Edited by TriumphST, 09 February 2012 - 21:19.


#264 Wi000

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Posted 11 February 2012 - 12:58

Trial against Gribkowsky on shaky ground?

The trial against ex-banker Gerhard Gribkowsky has been halted until the end of February. All four planned trial dates in the coming weeks have been cancelled.
According to a psychiatric expert there's a distinct possibility that Gribkowsky is unable/unfit to stand trial, the court will reconvene with experts on February 27th to determine if Gribkowsky is (mentally) sane enough for the trial to continue.

Apparently Gribkowsky's (mental) health has suffered from his long detention (since January 2011), many trial days (sometimes 3 a week), lack of food and fresh air. He has been diagnosed with "erheblichen seelischen Belastung" which could be translated as heavy emotional distress.

Get well (not too) soon Gerhard, I guess  ;)




#265 Ross Stonefeld

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Posted 11 February 2012 - 13:30

I'd be pretty stressed out too. And for the kind of money I'd be trying to keep my hands on I could probably endure all sorts of ills.

#266 MustangSally

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Posted 11 February 2012 - 14:49

Trial against Gribkowsky on shaky ground?

The trial against ex-banker Gerhard Gribkowsky has been halted until the end of February. All four planned trial dates in the coming weeks have been cancelled.
According to a psychiatric expert there's a distinct possibility that Gribkowsky is unable/unfit to stand trial, the court will reconvene with experts on February 27th to determine if Gribkowsky is (mentally) sane enough for the trial to continue.

Apparently Gribkowsky's (mental) health has suffered from his long detention (since January 2011), many trial days (sometimes 3 a week), lack of food and fresh air. He has been diagnosed with "erheblichen seelischen Belastung" which could be translated as heavy emotional distress.

Get well (not too) soon Gerhard, I guess ;)


Hmmmm . . . maybe they shoulda thought of that one.

What was the need to keep him in custody all this time? As I mentioned before, Bayern LB is hardly squeaky clean itself. And the funny part is, if Gerhard gets off on this rap of undervaluing F1, he will apparently be re-arrested for an opposite charge of overvaluing the Bayern purchase of an Austrian bank. Yet again, all other Bayern directors are walking free.

Like poster jjcale, I do suspect some scapegoating here.

But . . . good move by the defence. Next up, protest Bernie's testimony on the grounds of senility. You could have a field day with some of his 'not of sound mind' sound bytes.




#267 Wi000

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Posted 11 February 2012 - 15:41

What was the need to keep him in custody all this time?

Applying pressure simples, funny that it now might come back to bite them in the ass. :lol:

Here's an interesting article in German about Gribkowsky's situation in "Untersuchungshaft".

As I mentioned before, Bayern LB is hardly squeaky clean itself. And the funny part is, if Gerhard gets off on this rap of undervaluing F1, he will apparently be re-arrested for an opposite charge of overvaluing the Bayern purchase of an Austrian bank. Yet again, all other Bayern directors are walking free.

Guess if you're unfit to undergo one trial, it will be all the easier to get declared unable to stand another trial.  ;)


#268 jjcale

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Posted 11 February 2012 - 17:08

The reality is mainstream bankers while their actions were incompetence personified were rarely criminal nor were their actions to the best of my knowledge for their own benefit, unless you include retention of their well paid jobs or bonuses.

F1 is very different, Gribkowsky is alleged to have undervalued BayernLB's stake by over $1b according to Constantin Medien and of taken a bribe from Ecclestone to do so, that was criminal not incompetence and why the German Prosecutors take it so seriously.


"Rarely criminal" ... depends who's doing the reporting. "Actions for own benefit".... compartmentalisation is a bitch.

http://www.zerohedge...pulation-scheme

This is a thousand times bigger deal than Ecclestone's shenanigans... bet you will never see this in your newspaper.


BTW I am not saying these guys should not be convicted ... thanks for the update on the trial.

#269 MustangSally

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Posted 12 February 2012 - 01:17

Applying pressure simples, funny that it now might come back to bite them in the ass. :lol:

Here's an interesting article in German about Gribkowsky's situation in "Untersuchungshaft".


Thanks for the link. Yes now you mention it . . . people do go barking quite quickly just under house arrest.

I wonder if this suggests that the case is quite weak without a confession?


#270 TriumphST

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Posted 12 February 2012 - 11:02

"Rarely criminal" ... depends who's doing the reporting. "Actions for own benefit".... compartmentalisation is a bitch.

http://www.zerohedge...pulation-scheme

This is a thousand times bigger deal than Ecclestone's shenanigans... bet you will never see this in your newspaper.


BTW I am not saying these guys should not be convicted ... thanks for the update on the trial.


Depends on the paper's you read I suppose.

We're mostly aware how manipulation of markets occur, whether its insider dealing in the financial sector or a super-tanker parked in the middle of an ocean influencing energy spot prices for a month. The former illegal the latter not, but I don't think you're right in dismissing BE's or CVC's fraud as insignificant.

In a recent case Greenlight Capitol were fined £7m for mitigating losses by around £5m through (contested) insider dealing. While in the fraud involving Ecclestone and CVC who on the other hand stand to gain up to $2b through the undervaluation, so hardly insignificant.

But what strikes me is the Gribkowsky case is beginning to increasingly resemble aspects of the Guinness Four case.



#271 Wi000

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Posted 12 February 2012 - 14:02

I wonder if this suggests that the case is quite weak without a confession?

The defendant says nothing, the alleged briber says "it was not a bribe" but I was shaken down (something other witnesses confirm) and the banks say the F1 rights were not undervalued.

Now I understand that someone must pay for the mess the Bayrische turned out to be but I doubt this is the strongest case they have.
Maybe now with the threat of the trial being stopped due to Gribkowsky's health issues, the prosecution might be more inclined to go for some kind of settlement.

#272 HP

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Posted 12 February 2012 - 14:29

Trial against Gribkowsky on shaky ground?

The usual path taken. Mental distress diagnosed by a shrink. B***. At that rate, courts will be rendered useless.


#273 maximilian

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Posted 12 February 2012 - 14:36

Poor stressed rich criminals. I feel so sorry for them.

#274 Wi000

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Posted 12 February 2012 - 14:55

The usual path taken. Mental distress diagnosed by a shrink. B***. At that rate, courts will be rendered useless.

Well no final decision has been made yet but when you keep an accused man in custody/remand for more than a year and drag him to court sometimes 2 or 3 times a week where he has to spend hours waiting in the basement, then you run the risk that this has an effect on his (mental) health.

Not that I feel sorry for Gribkowsky but I don't think the prosecution are doing a very good/efficient job either.

#275 scheivlak

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Posted 13 February 2012 - 23:58

Just lightly related to this all: http://www.sueddeuts...-euro-1.1283292

The recent saga began when Leo Kirch's company -at one time the majority rights' holder of F1- went bankrupt in 2002.
Kirch held the Deutsche Bank responsible for this.

Yesterday, after years of legal struggle, the Deutsche Bank settled with Kirch's heritors and decided to pay them the nice little sum of 800 million euros.
Half of that money will go the Kirch's creditors - among them the Bayerische Landesbank BTW.

#276 MustangSally

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Posted 14 February 2012 - 01:21

Just lightly related to this all: http://www.sueddeuts...-euro-1.1283292


Yesterday, after years of legal struggle, the Deutsche Bank settled . . .


Naughty banks again. And these German court cases do go on forever and ever.

The other day I was reading about Rudolfine Steindling, who was involved with an Austrian Bank laundering money to the West from the former East Germany.

She began testifying when she was 58 and gave her final appearance in court aged 75 . . .

How fortunate that Gerhard is such a young man. :lol:


#277 TriumphST

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Posted 27 February 2012 - 15:32


Well well the trial goes on, Gribkowsky is healthy again, Ecclestone will be raging!

Edit: Perhaps I ought to have said the court today after a fortnights recess to allow a psychiatric assessment of Gribkowsky hasn't found he's so stressed as to be unable to stand trial, so game on as they say.

Edited by TriumphST, 27 February 2012 - 17:12.


#278 MustangSally

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Posted 28 February 2012 - 03:51

Well well the trial goes on, Gribkowsky is healthy again, Ecclestone will be raging!

Edit: Perhaps I ought to have said the court today after a fortnights recess to allow a psychiatric assessment of Gribkowsky hasn't found he's so stressed as to be unable to stand trial, so game on as they say.


Gerhard's return to good health may not be so surprising.

Der Spiegel is reporting that the prosecution may now be doing a deal. The bribery charge will be struck if Gerhard pleads guilty to tax evasion.

This is also being reported on RTL.

The report suggests that, while no one believes a word of Ecclestone's testimony, there is insufficient evidence to prove any different version of events.

If I recall correctly, at the very beginning of this case, Gerhard did indeed declare the money and paid tax on it, only in Austria, at a lower rate than would have been levied in Germany. Not such a big deal.



#279 TriumphST

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Posted 28 February 2012 - 10:09

Gerhard's return to good health may not be so surprising.

Der Spiegel is reporting that the prosecution may now be doing a deal. The bribery charge will be struck if Gerhard pleads guilty to tax evasion.

This is also being reported on RTL.

The report suggests that, while no one believes a word of Ecclestone's testimony, there is insufficient evidence to prove any different version of events.

If I recall correctly, at the very beginning of this case, Gerhard did indeed declare the money and paid tax on it, only in Austria, at a lower rate than would have been levied in Germany. Not such a big deal.




Maybe not for the reason you allude to, although in a different context people recall how the Guinness chairman Ernest Saunders successfully used a similar ill-health ploy (Alzheimer's) to stumble out of prison early only to make a miraculous recovery and back working in the 'City' a few months later. In Gribkowsky's case and the reason he's back to health is he's a little too young to pull off the 'Alzheimer defence' and his acting's apparently too hammish to fool the shrinks.

On the possibility of a deal while they'er not unknown, isn't this an unsubstantiated report from an uncredited source thats being doing the rounds from day one and haven't proceedings gone too far down the road to strike a deal that could have been done over a year ago?

Strangely if innocent, Gribkowsky is the one seemingly afraid to air a credible defence and for the second time (I think) is resorting to using health as a strategy to induce current proceedings to 'time out', leaving the Prosecutors a choice of a re-trial (including a re-investigation) or preferably total abandonment of the case.

You're correct, he did declare and pay tax, but he should have done so in Germany, not to do so was illegal. But the issue was where the $50m came from, what it was for and who paid it and initially as much to do with money laundering as anything. Well none of those involved volunteered an explanation, seemingly safe that nothing could be traced to them but they were wrong and now thanks to the tenacity of the German Prosecutors we know many of the answers.

What we also know is neither of the main conspirators is saying very much and what they are saying patently fails to stack up, Gribkowsky's between that rock and a hard place and as the implications sink in that he's the fall guy and looking at serious jail time with no nest egg to come out to, he'll probably crumble. When he does, Ecclestone's empire will follow.

On which point wasn't there talk prior to the recess of wholesale recalling of witnesses Ecclestone among them?

Edit 2nd Mar: Apparently on Monday as the court filled in some spare time by hearing a motoring case against Gribkowsky for careless/dangerous driving prior to his arrest. He was disqualified with a heavy fine, his earnings BayernLB were disclosed at €21,000/mth.

Edit 23rd Apr: 'Berliner DailyPost' reports the trial resumes today after a months recess for negotiation and hopefully will conclude within a month. Meanwhile on the rumour of CVC selling off 20% or thereabouts, Moody's have assessed f1's debt for the first time and given the group's a debt rating of 'Ba3' or in plain english 'junk bond'.

Edited by TriumphST, 23 April 2012 - 07:40.


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#280 MustangSally

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Posted 01 June 2012 - 22:40

I see the German press reporting that the end of the Gribkowky case is in sight.

Some minor charges against him have been dropped, but not the bribery and corruption charge.

Maybe not helping his case: some papers note that, following the recent valuation of F1, the bank's shares would now be worth six times the amount for which they were sold.

http://www.merkur-on...ch-2330620.html

For an encore, the bank will also bring charges against eight other directors of BayernLB concerning overpayment in the purchase an Austrian company.

So, the prosecutor seems as determined as ever and one wonders about the implications for Ecclestone. Apparently Ecclestone's former wife, Slavica, declined to appear. Lawyers had asked her to come to Munich as a witness.

#281 TriumphST

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Posted 18 June 2012 - 12:43

I see the German press reporting that the end of the Gribkowky case is in sight.

Some minor charges against him have been dropped, but not the bribery and corruption charge.

Maybe not helping his case: some papers note that, following the recent valuation of F1, the bank's shares would now be worth six times the amount for which they were sold.

http://www.merkur-on...ch-2330620.html

For an encore, the bank will also bring charges against eight other directors of BayernLB concerning overpayment in the purchase an Austrian company.

So, the prosecutor seems as determined as ever and one wonders about the implications for Ecclestone. Apparently Ecclestone's former wife, Slavica, declined to appear. Lawyers had asked her to come to Munich as a witness.


There is also an article in the FT (15th June) stating there are ongoing talks between Dr Gribkowsky and the state prosecutor about a deal on some of the minor charges and his coming clean. So as you ask, just what are the implications for CVC and Ecclestone and could the imminence of this verdict have been the reasoning for the scrapping of the scheduled CVC F1 IPO in Singapore?

Certainly if the papers have only now noticed that F1 was seriously under-valued they've been remiss since 2006, and any fool and their blind mother would have been aware of the fact given the annual profit/acquisition cost.

But give it till the verdict has been announced and then we'll likely see a plethora of cases from Lehman to Constantine Median hitting the courts seeking redress for the fraud which collectively deprived their shareholders of billions and of course the reason the IPO has been abandoned and a fire-sale of assets to other vulture funds such as Blackrock hurriedly instigated.

Edited by TriumphST, 18 June 2012 - 13:15.


#282 Juggles

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Posted 18 June 2012 - 15:17

There is also an article in the FT (15th June) stating there are ongoing talks between Dr Gribkowsky and the state prosecutor about a deal on some of the minor charges and his coming clean. So as you ask, just what are the implications for CVC and Ecclestone and could the imminence of this verdict have been the reasoning for the scrapping of the scheduled CVC F1 IPO in Singapore?

Certainly if the papers have only now noticed that F1 was seriously under-valued they've been remiss since 2006, and any fool and their blind mother would have been aware of the fact given the annual profit/acquisition cost.

But give it till the verdict has been announced and then we'll likely see a plethora of cases from Lehman to Constantine Median hitting the courts seeking redress for the fraud which collectively deprived their shareholders of billions and of course the reason the IPO has been abandoned and a fire-sale of assets to other vulture funds such as Blackrock hurriedly instigated.


Surely even if this verdict makes CVC liable for a large amount of money the value of F1's commercial rights would be unaffected? CVC have a 42% stake in F1 so in the event of a guilty verdict presumably they would be forced to sell F1 to raise capital; as you say, slices of the F1 pie may well go to asset managers like Blackrock but their interests would be the same as CVC before them: to make F1 as valuable as possible in order to cash out on an IPO. You seem to be suggesting that successful litigation against CVC would harm F1's value as well, but I don't see how?

According to FT figures, in 2011 F1 "generated $451m of operating profit on revenues of $1.5bn." Those are staggering operating margins. I had no idea F1 was so profitable. My point is, once CVC are forced to sell (if indeed they are) surely the only thing that matters is how attractive F1 is to investors because it will have left the murk of CVC behind?

#283 BRG

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Posted 18 June 2012 - 16:50

According to FT figures, in 2011 F1 "generated $451m of operating profit on revenues of $1.5bn." Those are staggering operating margins. I had no idea F1 was so profitable.

Well, it effectively doesn't have any costs, does it? What other industry compels its suppliers (circuits) to pay for the privilege, as well as its consumers. And the product itself (teams, cars, drivers) is paid for by other people (sponsors, manufacturers, Venezuela) as well. F1's costs are just a little bit of admin. Money for old rope really, as Bernie has known for years. Finally, perhaps realisation will dawn on everyone else!

#284 TriumphST

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Posted 18 June 2012 - 18:52

Surely even if this verdict makes CVC liable for a large amount of money the value of F1's commercial rights would be unaffected? CVC have a 42% stake in F1 so in the event of a guilty verdict presumably they would be forced to sell F1 to raise capital; as you say, slices of the F1 pie may well go to asset managers like Blackrock but their interests would be the same as CVC before them: to make F1 as valuable as possible in order to cash out on an IPO. You seem to be suggesting that successful litigation against CVC would harm F1's value as well, but I don't see how?

According to FT figures, in 2011 F1 "generated $451m of operating profit on revenues of $1.5bn." Those are staggering operating margins. I had no idea F1 was so profitable. My point is, once CVC are forced to sell (if indeed they are) surely the only thing that matters is how attractive F1 is to investors because it will have left the murk of CVC behind?


Any action or charges stemming from Gribkowsky being found guilty will be criminal and Ecclestone will anticipate being charged, whether CVC will be able to distance themselves from Ecclestone remains to be seen should charges materialise, I suspect not.

Certainly the value of F1's commercial value is unlikely to suffer as that is formulated by business considerations and not the criminal actions of some of those involved, whether F1 is now fairly valued at $9b+ is suspect, there again profit before prize money is of the order of $2b ($1.5b net) annually so a valuation approaching $10b may not be too unrealistic.

But those that feel aggrieved because of the undervaluation will seek redress, tying up CVC and Bambino in the High Court for years.

Ironic that F1's latest value which can't be justified simply by a better management team or trading conditions could be the final nail in Ecclestone's coffin, the inference being that it was criminally undervalued in 2005 and earlier valuations of $4-5b were accurate and not the $1.8b Ecclestone has constantly maintained over-valued the business in 2005/6.

Edited by TriumphST, 18 June 2012 - 19:06.


#285 jjcale

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Posted 19 June 2012 - 08:56

Any action or charges stemming from Gribkowsky being found guilty will be criminal and Ecclestone will anticipate being charged, whether CVC will be able to distance themselves from Ecclestone remains to be seen should charges materialise, I suspect not.

Certainly the value of F1's commercial value is unlikely to suffer as that is formulated by business considerations and not the criminal actions of some of those involved, whether F1 is now fairly valued at $9b+ is suspect, there again profit before prize money is of the order of $2b ($1.5b net) annually so a valuation approaching $10b may not be too unrealistic.

But those that feel aggrieved because of the undervaluation will [now?] seek redress, tying up CVC and Bambino in the High Court for years.

Ironic that F1's latest value which can't be justified simply by a better management team or trading conditions could be the final nail in Ecclestone's coffin, the inference being that it was criminally undervalued in 2005 and earlier valuations of $4-5b were accurate and not the $1.8b Ecclestone has constantly maintained over-valued the business in 2005/6.


... big assumption there.

Also ... it may be that these folks have a high tolerance for litigation and a lot of that could have been going on out of the public eye - not everything interesting gets reported .... and also it may be that these issues have been in dispute in one form or another over the years and some of these issues may have already been resolved... we are not dealing with dummies here.... just sayin'.

#286 MustangSally

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Posted 19 June 2012 - 10:44

Any action or charges stemming from Gribkowsky being found guilty will be criminal and Ecclestone will anticipate being charged


I think one German report indicated that the Judge has already declared he considers Gribkowsky guilty - he dismissed some defence evidence last Monday. This apparently hurried the defence lawyers into discussing the plea bargain. It doesn't look good for Ecclestone. There's no point in anyone going after Gribkowsky for money. Even if he had any left after this process, he is up on trial next for the Hypo Adra business . . . where the bank is suing him and seven other Bayern directors for 200m damages.



#287 TriumphST

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Posted 19 June 2012 - 18:54

I think one German report indicated that the Judge has already declared he considers Gribkowsky guilty - he dismissed some defence evidence last Monday. This apparently hurried the defence lawyers into discussing the plea bargain. It doesn't look good for Ecclestone. There's no point in anyone going after Gribkowsky for money. Even if he had any left after this process, he is up on trial next for the Hypo Adra business . . . where the bank is suing him and seven other Bayern directors for 200m damages.

I think your absolutely right. But it's never the bribed that benefits disproportionately it's always the briber who stands to gain, in this case a value over what was paid amounting to $3.2b. Not a bad return for $50m or thereabouts.

While the Munich Prosecutor won't be too worried about the amount but I wonder if there is the facility in German law to claw back the proceeds of crime presumably from Ecclestone, CVC and the other beneficiaries and return it to those that lost out back down the chain from the Kirch Group onwards?

#288 TriumphST

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Posted 19 June 2012 - 19:44

... big assumption there.

Also ... it may be that these folks have a high tolerance for litigation and a lot of that could have been going on out of the public eye - not everything interesting gets reported .... and also it may be that these issues have been in dispute in one form or another over the years and some of these issues may have already been resolved... we are not dealing with dummies here.... just sayin'.


As big as hypothesising there were contingency plans in place that were triggered by what, maybe an anticipated Gribkowsky guilty verdict?....think about it. Furthermore, something like this not getting reported...really?

As for these people not being dummies, just how many raised the spectre of something being seriously amiss in 2005/6 or even later?....just sayin'.



#289 MustangSally

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Posted 19 June 2012 - 19:56

I think your absolutely right. But it's never the bribed that benefits disproportionately it's always the briber who stands to gain, in this case a value over what was paid amounting to $3.2b. Not a bad return for $50m or thereabouts.

While the Munich Prosecutor won't be too worried about the amount but I wonder if there is the facility in German law to claw back the proceeds of crime presumably from Ecclestone, CVC and the other beneficiaries and return it to those that lost out back down the chain from the Kirch Group onwards?


Interesting comment . . . because this is what I really don't understand. I think (I really don't know for sure) that in British law a company is liable for the conduct of its employees. Bayern's own man led the sale negotiations on the basis of the bank's valuation, which was written and signed off in the bank's books. Corporate error? Sloppy banking?

But hang about. The bank paid Bernie the commission on the sale . . . 40m wasn't it? . . so wasn't it Bernie who led the negotiations? In which case why isn't Bayern suing Bernie in the first place? On the other hand, Bernie's answer to the bribery charges has always been, quote something like, 'Why would I bribe Gribkowsky, he was negotiating on my behalf'. Which if you consider that the Bambino shares were being sold at the same time, sounds at face value like fair comment.

It's all kinda confusing - and the reporting on this case has been really bad - but I imagine the Bayern bank would like a verdict that poiinted fingers at Ecclestone rather than their own employee?










#290 TriumphST

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Posted 20 June 2012 - 07:53

Interesting comment . . . because this is what I really don't understand. I think (I really don't know for sure) that in British law a company is liable for the conduct of its employees. Bayern's own man led the sale negotiations on the basis of the bank's valuation, which was written and signed off in the bank's books. Corporate error? Sloppy banking?

But hang about. The bank paid Bernie the commission on the sale . . . 40m wasn't it? . . so wasn't it Bernie who led the negotiations? In which case why isn't Bayern suing Bernie in the first place? On the other hand, Bernie's answer to the bribery charges has always been, quote something like, 'Why would I bribe Gribkowsky, he was negotiating on my behalf'. Which if you consider that the Bambino shares were being sold at the same time, sounds at face value like fair comment.

It's all kinda confusing - and the reporting on this case has been really bad - but I imagine the Bayern bank would like a verdict that poiinted fingers at Ecclestone rather than their own employee?


The answer is they will, once the initial hurdle of his bribery of Gribkowsky is established, BayernLB like everyone with a vested interest is awaiting the verdict, as you know Constantin Median a bit part player in all this, are still looking for $100m compensation in the UK's High Court with that action (like others) is also on hold till the Gribkowsky verdict's in. That court has already stated Ecclestone admitted to bribery in paying Gribkowsky, though in this case as in Munich he maintained it wasn't connected with the F1 purchase but tax/trust fund related but draws the line at accusing Gribkowsky of blackmail.

Even the Kirch estate has a related claim on BayernLB's duty of care regarding the initial CVC sale.


So clarity is what everyone is awaiting with the verdict after which, should Gribkowsky be found guilty I'd expect seismic activity within F1 and the floodgates on both criminal as well as civil litigation to open, after all in bribery cases it takes two to tango.

As an aside I also suspect this fire-sale was in response to the cancelled Singapore IPO which was doomed to failure for reasons other then reported, and is calculated to muddy the water's by CVC having milked F1 and the FIA of billions, a minority shareholder in F1 and the latest investors in control of a highly leveraged F1 to squabble over. Neat or what.

#291 jjcale

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Posted 20 June 2012 - 09:22

As big as hypothesising there were contingency plans in place that were triggered by what, maybe an anticipated Gribkowsky guilty verdict?....think about it. Furthermore, something like this not getting reported...really?

As for these people not being dummies, just how many raised the spectre of something being seriously amiss in 2005/6 or even later?....just sayin'.


No not saying that... just saying that the stuff coming out now would not necessarily be news to the folks involved and its possible that (some of) the issues have already been resolved.... also ask yourself who exactly is going to now bring a case (and more importantly, would they really have the motivation to fight this, properly) ... not saying it cant/wont happen, but I would be more suprised if they did than if they didnt.

BTW there have been cases in the Courts involving F1 that have not got any publicity... they didnt get to trial, that is part of the reason why.

Everything about F1 seems seriously amiss... people question it all the time.... also look at who had the rights at that time and who had them before ... and all the crap that had happened between the late 1990s and 2005/6....

Perhaps the best thing that could happen to F1 might be for it go public... then you would quickly get your wish to see the back of Bernie, the level of openness required would be like sunlight to a vampire.... people can play games with court cases (at least civil cases), dont put too much hope in that.

Edited by jjcale, 20 June 2012 - 09:50.


#292 eta

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Posted 20 June 2012 - 09:55

http://www.focus.de/...aid_770031.html

#293 drunkenmaster

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Posted 20 June 2012 - 11:11

Top manager admits bribery by Ecclestone

Surprising turn in the bribery process: Former board member of BayernLB Gerhard Gribkowsky testified that he has taken 44 million dollars from Formula 1 boss Bernie Ecclestone.

Former BayernLB board member Gerhard Gribkowsky made a confession in the trial about bribes during the Formula 1 sale. The indictment is mainly correct, he told the Munich District Court.

Previously he had remained silent in court for eight months on the charge of having accepted a $ 44 million bribe from Formula 1 boss Bernie Ecclestone.

In return for the confession, Gribkowsky has been offered by the court a prison sentence between seven years and ten months to nine years.

http://www.welt.de/w...Ecclestone.html

#294 TriumphST

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Posted 20 June 2012 - 11:15

No not saying that... just saying that the stuff coming out now would not necessarily be news to the folks involved and its possible that (some of) the issues have already been resolved.... also ask yourself who exactly is going to now bring a case (and more importantly, would they really have the motivation to fight this, properly) ... not saying it cant/wont happen, but I would be more suprised if they did than if they didnt.

BTW there have been cases in the Courts involving F1 that have not got any publicity... they didnt get to trial, that is part of the reason why.

Everything about F1 seems seriously amiss... people question it all the time.... also look at who had the rights at that time and who had them before ... and all the crap that had happened between the late 1990s and 2005/6....

Perhaps the best thing that could happen to F1 might be for it go public... then you would quickly get your wish to see the back of Bernie, the level of openness required would be like sunlight to a vampire.... people can play games with court cases (at least civil cases), dont put too much hope in that.


But not because the information wasn't in the public domain, simply because there was no public interest... Can't seriously imply the issues surrounding F1 bribery scandal wouldn't be worthy of a few column inches.

While I'd be only to keen to look at how F1's commercial rights were manipulated prior to 2005 unfortunately there wasn't a prima facia case of bribery to fan the investigative flames either then or now. On your premise that "its possible that (some of) the issues have already been resolved..." such as what?

I'd suggest that CVC rushing to divest itself of it's holdings in F1 is an indicator of it's haste in abandoning a sinking ship with pocketfuls of gold and not seeking to right the wrongs of 2005/6. In any event those wrongs were criminal by all accounts, civil action which one would expect to follow will I'll contend consist of all the interested disadvantaged parties taking action against all those that benefited directly or indirectly through a criminal fraud.

Edit:
Just came across this on motorsport.com, which I thought was funny,

Germany's Auto Motor und Sport quoted Gribkowsky as saying the amount offered by Ecclestone was "a huge pile of money".

He recalled a meeting with Ecclestone in which the diminutive Briton asked him to "give me numbers".
Gribkowsky said 50 million and ultimately received that amount, although the former banker admitted he had only expected perhaps $10m.


Now I also looked in on that forum that usually follows the 'ecclestone line' as it were, and yes there no mention of getting it wrong for all these months. However, they continue to put out the 'shaken down' defence and intrestingly say Ecclestone has the option (don't quote me on this) of returning I think the fee BayernLB paid him and in effect that will end the matter. So as delusional as ever.

Edited by TriumphST, 20 June 2012 - 15:21.


#295 MustangSally

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Posted 20 June 2012 - 13:44

. . . all the interested disadvantaged parties taking action against all those that benefited directly or indirectly through a criminal fraud.


It will be an interesting case, since the disadvantaged will presumably have to argue that there might have been another buyer and what that buyer may have paid. All this is hypothetical.

However . . .

Although the bank seemingly won this case, it is really most at fault for undervaluing the Kirch stake on its books. According to an old Spiegel article, Kirch paid 2.7 bn for the stake which CVC acquired via Bayern for a little less than 1bn . . . but still more than the figure assigned by Bayern LB on its books.

As far as I understand the history, Bernie's main interest in pushing CVC as a buyer was largely because. under the deal, he would effectively remain in control of F1 in a new relationship with CVC.

Anyway. Seven to nine years for Gribkowsky? I don't know what they'll throw at Bernie, because he clearly committed perjury - or whatever it is in German. Does he have that long?



#296 TriumphST

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Posted 20 June 2012 - 16:34

It will be an interesting case, since the disadvantaged will presumably have to argue that there might have been another buyer and what that buyer may have paid. All this is hypothetical.

However . . .

Although the bank seemingly won this case, it is really most at fault for undervaluing the Kirch stake on its books. According to an old Spiegel article, Kirch paid 2.7 bn for the stake which CVC acquired via Bayern for a little less than 1bn . . . but still more than the figure assigned by Bayern LB on its books.

As far as I understand the history, Bernie's main interest in pushing CVC as a buyer was largely because. under the deal, he would effectively remain in control of F1 in a new relationship with CVC.

Anyway. Seven to nine years for Gribkowsky? I don't know what they'll throw at Bernie, because he clearly committed perjury - or whatever it is in German. Does he have that long?

With this thread coming to an end I looked at your comment and realised I'd never considered Gerhart Gribkowsky the man, empathised with his position of having lost everything, his ruined reputation and the how devastatingly this process will have affected his family.

Thinking of what occurred I thought how unlucky the guy was, in the middle of a relatively successful career and family, probably unblemished reputation and character that he should come across Ecclestone who would place such temptation in a mans way so as to ruin every aspect of his life, and for what? A few more billions to add to those he'd never be able to spend even were he a young man again.

For that alone Ecclestone at 81 ought to be stripped of every penny he or his trusts have, to be guaranteed a life expectancy till 110 years, and be sentenced to 20-years imprisonment.

Edited by TriumphST, 20 June 2012 - 17:12.


#297 jjcale

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Posted 20 June 2012 - 16:56

But not because the information wasn't in the public domain, simply because there was no public interest... Can't seriously imply the issues surrounding F1 bribery scandal wouldn't be worthy of a few column inches.

While I'd be only to keen to look at how F1's commercial rights were manipulated prior to 2005 unfortunately there wasn't a prima facia case of bribery to fan the investigative flames either then or now. On your premise that "its possible that (some of) the issues have already been resolved..." such as what?

I'd suggest that CVC rushing to divest itself of it's holdings in F1 is an indicator of it's haste in abandoning a sinking ship with pocketfuls of gold and not seeking to right the wrongs of 2005/6. In any event those wrongs were criminal by all accounts, civil action which one would expect to follow will I'll contend consist of all the interested disadvantaged parties taking action against all those that benefited directly or indirectly through a criminal fraud.

Edit:
Just came across this on motorsport.com, which I thought was funny,

Germany's Auto Motor und Sport quoted Gribkowsky as saying the amount offered by Ecclestone was "a huge pile of money".

He recalled a meeting with Ecclestone in which the diminutive Briton asked him to "give me numbers".
Gribkowsky said 50 million and ultimately received that amount, although the former banker admitted he had only expected perhaps $10m.


Now I also looked in on that forum that usually follows the 'ecclestone line' as it were, and yes there no mention of getting it wrong for all these months. However, they continue to put out the 'shaken down' defence and intrestingly say Ecclestone has the option (don't quote me on this) of returning I think the fee BayernLB paid him and in effect that will end the matter. So as delusional as ever.


Hard to say exactly what the public would be interested in. Putting F1 in a story tends to guarantee views all by itself ... but yeah, its not been terribly exciting stuff that I've been thinking of... but then I can think of really exciting stuff that got no publicity (but which didnt have anything to do with F1)... but yeah, this one will be front page news if it happens.

I dont really know what's happening in F1 these days and I dont even follow it in papers ... except when you or others here cite it... but I have a decent understanding of what used to be going on.... and its all been exciting.

I suppose the most important thing as to what happens next is whether Bernie will be prosecuted (presumably in Germany). If doesnt happen, I can see him getting away with it ... again. I have to say though, I was not expecting that to be a real possibility at the start of this journey.... even now, how many of us seriously expect Bernie to end up in jai, even after the latest development. Not too many, I think.... It could just be normalcy bias, but I am not there yet.

Edited by jjcale, 20 June 2012 - 16:57.


#298 ayali

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Posted 20 June 2012 - 20:19

Maybe I missed it but from what I've read the only thing that banker admitted today was that he took the 44 million
Now surely everybody knew about that and Bernie admitted to paying him
Nowhere was any undervaluation mentioned of the F1 stock
In fact damages were estimated at 66 million in fees paid that the banker thinks he could or should have negotiated away

Banker says he took the money to be cooperative with Ecclestone, Bernie says he was shaken down
Almost convicted banker with a last minute confession to lower his sentence after a year of silence against billionaire with all the money and lawyers in the world

Me thinks Bernie will get away with it
as he always does

:cool:



#299 scheivlak

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Posted 20 June 2012 - 20:54

Banker says he took the money to be cooperative with Ecclestone


From http://www.focus.de/...aid_770031.html I gather that he also said he did it because Bernie would offer him a well paid job in return. One might call that bribery.

Of course one might expect Bernie trying to turn this one around as well.

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#300 MustangSally

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Posted 20 June 2012 - 21:20

Hard to say exactly what the public would be interested in


Yes. It depends on the public mood.

The mood in Germany is fairly anti-bankster at the moment . . . I think this aspect has drawn more attention than the F1 link . . . Bayern's claim against Gribkowski's 50m is peanuts compared to the billions it lost in other ventures, like American sub prime MBS . . . there is a scapegoating element.

Bayern is actually one of the very few European banks that is prosecuting former directors . . . probably because its local taxpayers had to pick up the bailout bill for its losses . . .

And like the Greek - Eurozone crisis, ir can get personal in Germany.

I think if there are natural consequences from this verdict, Bernie can expect a hanging judge in Germany.

But maybe we will read tomorrow that he has joined Julian Assange in some South American Embassy.