CVC denies…

CVC Capital Partners, the majority owners of the Formula One group, has issued a press statement noting a press release from the Bavarian State Prosecutor’s office in Munich, relating to Bayerische Landesbank.

“CVC can confirm that it has no knowledge of these investigations, nor any circumstances surrounding them, and that we have had no contact with the relevant authorities, nor with Mr Gribkowsky regarding this matter,” the statement said. “Furthermore CVC confirms that it has no knowledge of, nor any involvement in, any payment to Mr Gribkowsky or anyone connected with him in relation to CVC’s acquisition of Formula One.”

The folk at CVC will no doubt be as interested as everyone else to discover the source of Mr Gribkowsky’s $50 million nest-egg which popped up recently in an Austrian foundation.

22 thoughts on “CVC denies…

  1. I think there are a lot of people desperate to find out – if CVC is clueless as to the source of the $50m as the investigators, then that doesn’t leave a huge number of explanations as to where the money came from. I’m not sure where this is going, but I’m worried about it.

    1. Alianora La Canta,

      There is no guarantee that this has anything to do with Formula 1. Remember that the Hypo Alpe-Adria Bank lost billions.

  2. Would be fantastic if somehow this leads to CVC & Bernie being ousted out of F1.
    Would be rather more interesting to investigate Max Mosley’s accounts, trusts and so on.

  3. According to SudDeutcheZeitung, the cash in question came from Mauritious. That source is cited by Bloomberg as well.

    Interesting chap, this Gribkowski, he seems to have had a little much on his plate for one person to handle.

    The Telegraph expands that the charges are laid by BayernLB, essentially claiming he made an undervalued sale and took kickback cosultancies.

    That’s a big allegation. From a bank who – even being uncharitable – might be still trying to save face over other more significant losses. Pivotal cheat, or sacrificial lamb?

    But, honestly, Austrian foundation? Bit amateur for a bank board type. And washing money in this political scene? You could have done that a few years ago, doubt anyone would have blinked, but not now, and not with a bunch of very annoyed ex – colleagues in exalted positions.

    What I’m getting at is the old as the hills problem of how to evaulate a alleged perp who comes across as a bit too bumbling to have pulled of the heist.

    Fascinating indeed. I think Joe beat the news organisations by a full 48 hours on this one.

    All you have to do now, Joe, is solve the crime! 🙂

    (If there is a crime, oh dear, enough already)

  4. Clarification: the first news dateline is 03 Jan, from SudDeutsche, who, being bloody good and on the spot, you’d expect to be on the story. Joe beat out the English language press. Again.

    I was thinking flippantly about all the failed names in F1. Guess we have to add Bayerische LB to that tally. Hope no-one minds me saying so, but but i keep imagining the tones of “F1 Rejects”, only for companies. An intrepid researcher might pick up any of the freely available lexical parsers, point it here, and start a betting index 🙂 The technical bit is easy, the hard bit is always definitions, e.g. what consitutes an event. Any PhD candidates out there in need of a fun term project? Roll up!

    I’m muttering about very geek things, but next month IBM is pitching their latest computer (moreover a very modest sized computer) against the current record holder in the game show Jeopardy, live, so real AI is newsworthy again, as opposed to the approximated not – really – AI sold to us by certain web search companies.

    Someone asked why not concatenate Joe’s articles on this subject. I think that would break how blogs are supposed to work, as they are “in motion” things. But a specific tag for this possibly emerging scandal might help.

    all best to all,

    – j

  5. Ivan,

    “Would be rather more interesting to investigate Max Mosley’s accounts, trusts and so on.”

    Now, all you have to do is break client – attorney privilege.

    I don’t think you actually want to do that.

    I’ve met too many lawyers dabbling in business, because they get a whif of how their status can supposedly help oil the cogs of unusual deals. They usually fail, hubris is too expensive for any kind of economy. But really, there’s an angle on Max? Really?

    Deadly serious now, the funny lawyers I met were usually solicited by business characters on the scam. There’s often a good selection in publishing.

    There are definite advantages to such a combination, but it’s not a wothwhile possibiity for amateur opportunists, and to manage the inevitable conflicts, you’d both better be top of the game.

    Not sure i can see only the funny side, but cheers anyway,

    – john

  6. This just in,

    and a bunch of disclaimers here, because instead of turning on the tape of Canada ’10 quali, I spent my evening on the phone with the German girl i ought to have married, who, funnily, works for a very big (different) buyout firm . . .

    The accusation seems to be that Gribkowski had SOLE control over where the rest of the shares went.

    I don’t know how the board system in Germany fails so bad, because I rather like the dual board format, we’d do well to adopt it, but now I am getting echoes from the interview published on which clatter in my head.

    This is based, not in any absolute fact, but on a hour of talking back and forth trying to suss the translations from Speigel and the Zeitung. M and her company have Zero interest in F1, so it was all straight talk.

    I’m promised some further investigation, I shall I think enforce that debt!

    Call me Alice 🙂

    – john

  7. Now, who could have wired that $50M into Mr. G’s account? Who would profit most from the sale of shares to CVC at an inflated price? It’s all a bit obvious, isn’t it?

  8. The Süddeutsche Zeitung reports today in a long and rather elaborate story that Gribkowsky approached the prosecutor in Munich himself between Christmas and New Year’s Day. Did he offer her a fully blown confession with all sorts of juicy details? No, obviously he wanted her to stop the newspaper from harassing him with questions where all that money in his Austrian (corporate tax of 25 % compared to the 40 % in Germany) foundation came from.
    The story also depicts how Gribkowsky more or less stumbled upon the F1 shares in BayernLB’s account and found that world and all its glitter really interesting and seductive. There’s a pic of him with Bernie Ecclestone and Niki Lauda apparently enjoying the wonderful facilities in Bahrain. One line in the article just says: “Bernie and Gerd.” Seems like the two guys got along really well.

  9. It’s interesting that CVC’s comprehensive denial omits, in the last sentence, to say”CVC or anyone connected with CVC” whereas they do say “Mr Gribkowsky or anyone connected with him”.

    It is not unfeasible that a bona fide business structure may have been in place whereas an intermediary was paid $xxxmillion to negotiate and conclude the deal including acquisition costs and expenses. Expenses which could include payments to intermediaries and facilitators such as the alleged payment to Gribkowsky.

    CVC may well have been the ultimate source of the payment (and even this is in doubt) but the denial makes clear the fact that they were unaware of the alleged payment to Gribkowsky, which is perfectly feasible.

    Bear in mind also that the issue appears primarily to be whether a payment was illegally concealed by the recipient. A party to a deal such as CVC, or the intermediary for that matter, would certainly have had no knowledge or control over whether the recipients declared it legitimately. My bank pay me interest but won’t be implicated if I evade tax by not putting it on my tax return.

    The courts will decide Gribkowsky’s fate. Even if he is found guilty it wouldn’t in any way imply that CVC were complicit.

  10. @ joesaward
    Lon, One should never jump to conclusions that one cannot prove

    True, but let’s not forget Occam’s Razor.

  11. Martin,

    that’s called a walk – in. You get a polite word they want you for something, so you walk in with some kind of representation to hear what they have to say. Then they might arrest you anyway, but it’s infinitely preferable to wasting everyone’s time with a warrant.

    There’s a lot of editorial color coming out, which is normal for Spiegel, but dont compare them with British Red Tops. Spiegel often does very useful work; historially some awesome stuff. Does that mean an office is leaky? If i were either side, I’d want to be very leaky about anything but the facts. Get my oar in.

    As for the taxation, it’s not hypothetically unreasonable to imagine that tax has been paid, under treaty, but there exist comon law issues with privity of other partners of Gribkowski which only a court order can break. (i.e. tax is paid elsewhere, and not due again by double taxation treaty. Equally, there have been some gross attempts at retrospectve taxation all across the board)

    So I’d say the odds are we won’t hear much that puts this to bed, unless there’s a smoking gun.

    Neither would i say it’s beyond imagination to think this is a ruse to try to shake down CVC and Bernie, as others have – i think – alluded they believe. How cute, if red faced curators at Bankrupt Bayern at the same time save a little grace with some “go away” money? Believe it or not, i’ve seen desperate people prostitue themselves like that on spec, with no complicity from the party they think they will scratch backs with.

    Back to the foundation, what’s to say it is not properly formed, does not have bona fide beneficiaries? Trusts and foundations are fiendishly complicated because heirs and beneficiaries are fiendish in looting them.

    The problem is that 50MLN is peanuts in business now, meanwhile every govvy department anyhere you care to mention is in Grab It All mode.

    Local to me, where we have seriously bloated local government, which by the proper Act is an actual dictatorship save for limited finance committee review (it’s same for all in England), it’s the Libraries who get it in the neck first. That’ll show us, for thwarting a childishly obvious plan for a councillor to sell the choicest of them – an essential historical origin of our neighborhood’s historical name, no less – to himself as derelict and worthless. I bet as much and worse is in the works, even in the most conservative Munich departments. State employees get jealous. Bayern came late to mortgage strips (as they were originally called), and though heads rolled, did not pay. A few London councils once tried some heavy forex swaptions, spitting hundreds of millions down the drain when that was real money, got saved by a extraordinary ruling of Ultra Vires, which did nothing but give them a sense of invincibility. Maybe some people didn’t want to see the new local government acts broke.

    I think i’ll keep signing as Alice, on this story. There was a wonderful director of the EDB who could only understand western culture by reciting Carroll, so it fits, and is a family name too 🙂

    – Alice

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