F1 ringmaster Bernie Ecclestone has for the first time publicly admitted that he did indeed pay $44 million (£27.3 million) to German banker Gerhard Gribkowsky during the sale of the sport's commercial rights to CVC Capital Partners five years ago – only he is adamant that the money was not
As chief risk officer at Bayerische Landesbank (BayernLB), Gribkowsky oversaw the sale of the state-owned German bank's 48 per cent stake in F1 owners SLEC Holdings to private equity firm CVC back in 2006. Munich's state prosecutor alleges that in doing so, he accepted a bribe from Ecclestone to push the deal through without updating the valuation of BayernLB's shares in the sport, thereby making them cheaper than they would otherwise have been.
In return for his complicity, the prosecutor contends, two bribes disguised as 'fake consulting contracts' totalling $44 million – on which he did not pay tax – were paid into an Austrian company in Gribkowsky's name by somebody identified only as 'Bernard E'.
At around the same time, Formula One Management (FOM) chief executive Ecclestone received $41.4 million (£25.4 million) in commissions from Gribkowsky on behalf of BayernLB, with the British billionaire's family trust Bambino Holdings benefitting from a further $25 million (£15.5 million) [see separate story – click here
Gribkowsky has remained in Munich's notorious Stadelheim prison since his arrest on 5 January, and is expected to go on trial this autumn on charges of embezzlement, tax evasion and receipt of corrupt payments for costing BayernLB as much as $66.5 million; if convicted, he faces up to ten years in jail.
Ecclestone remains under investigation, but has consistently maintained that he has done nothing wrong and has vowed to clear his name – and he has now revealed that he paid Gribkowsky the money after the latter threatened to cause him trouble with Britain's tax authority the Inland Revenue.
Having hitherto kept quiet on the matter at the request of prosecutors, the British billionaire has now told The Daily Telegraph
that Gribkowsky had suggested he could make life difficult for him by highlighting irregularities with his offshore family trust Bambino and 'threatened that he was going to say I was running it'. Ecclestone insists he 'never had anything to do with the trust in any shape or form'.
At the time, he had been transferring shares in F1 to the trust in an effort to avoid his then wife Slavica – a non-domicile – having to pay inheritance tax in the event that anything happened to him. Ecclestone is adamant that the respective payments were not linked.
“The Revenue obviously had to check everything,” he explained. “It took five years going through that. I didn't deal with it. The trust had to show it was correct. The taxation people in England at the time were in the middle of settling everything with the trust, and the last thing you need is for them to start thinking something different.