Swiss open probe over Ecclestone Formula One stake sale

Swiss prosecutors said Tuesday they were 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.

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, the latest in a series of legal battles.

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 USD 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 USD 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 explained.

In July, prosecutors in the southern German city of Munich charged 82-year-old Ecclestone in relation to a USD 44 million (33.6 million euro, 29 million pounds) 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 Tuesday, with a lawyer telling the High Court that the Formula One chief made a "corrupt bargain" with a banker to ensure the group was sold to a buyer of his choosing.

Ecclestone controls about a five-percent stake in Formula One, which he has cannily built into an empire with annual revenues of about USD 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 USD 10 billion when the flotation finally goes ahead.

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