CVC to probe alleged bribery scandal

Buyout giant CVC Capital Partners has launched an internal investigation into an alleged bribery scandal surrounding its acquisition of Formula One in 2006.

Accounting titan Ernst & Young and magic circle law firm Freshfields Bruckhaus Deringer will look into bribery allegations surrounding CVC’s $1.7 billion acquisition of motor racing business Formula One in 2006, confirmed a source with knowledge of the matter. The investigation was not brought upon by any external authority, said the source.

The buyout stalwart launched an investigation alongside the board of Delta Topco, which is F1’s holding company, into an alleged kickback for former banker Gerhard Gribkowsky in arranging the sale, according to a report from Sky news.

The probe follows the January arrest of Gribkowsky, a former executive at German bank Bayerische Landesbank, who reportedly received $50 million after the bank sold its stake in F1 to CVC in 2006. German prosecutors reportedly claim Gribkowsky had misled his former employer into underselling its stakes, earning him $50 million in consultancy fees from an unnamed payment source.

At the time of the arrest CVC stated “it had 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 group declined further comment.

E&Y declined to comment on the matter and Freshfields was unable to be reached by press time. The two firms have reportedly been instructed to submit their findings within a matter of weeks. The 2011 Formula One World Championship races kick off next month.