German media firm seeks damages from Ecclestone for F1 sale

German media firm seeks damages from Ecclestone for F1 sale
F1 supremo Bernie Ecclestone

LONDON - Bernie Ecclestone's management of Formula One will face scrutiny next week when a German media firm seeks more than US$100 million (S$124 million) in damages over a deal that made CVC Capital Partners the motor sport's main shareholder.

The civil case in London's High Court is scheduled to open on Tuesday, a day after the diminutive Ecclestone turns 83. Despite his age, Ecclestone remains the hands-on chief executive of a business he has helped to turn into a global money-spinner over the last four decades.

German company Constantin Medien will argue that Ecclestone and three other defendants deliberately undervalued Formula One when private equity fund CVC bought into the business in 2005.

The legal fallout from the sale has already seen a former German banker jailed in Munich, complicated plans to float Formula One on the stock market and brought the Ecclestone succession issue into focus.

Germany's BayernLB was one of the banks left in control of Formula One a decade ago after the collapse of Bavarian Leo Kirch's media empire, which owned the rights. BayernLB sold a stake of 47 per cent to private equity firm CVC for around US$830 million in 2005.

As the successor company to a former Formula One shareholder, Constantin says it missed out on a share of the additional proceeds had the stake fetched a higher price.

The damages claim compares with a market capitalisation of around 137 million euros (US$189 million) for Constantin, a sports-focused media group based in southern Germany.

BUSINESS AS USUAL

Ecclestone, who denies any wrongdoing, has been accused of favouring a sale to CVC because it wanted to keep him on as commercial chief of a sport that attracts hundreds of millions of TV viewers to the races it stages around the globe.

He told Reuters that he expected to be called as a witness in the damages case next month after he has attended the Indian Grand Prix this weekend and the race in Abu Dhabi on November 3.

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