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Ecclestone due in court over bribery, tax accusations

Bernie Ecclestone is facing an HMRC investigation in addition to facing Gerhard Gribkowsy in court over bribery charges.

F1 ringmaster Bernie Ecclestone could be liable for a substantial tax bill if UK investigations can prove how closely he is involved with an offshore family trust.

The HMRC has been alerted to the possibility of tax evasion by the soon-to-be-heard case involving Ecclestone and German banker Gerhard Gribkowsky, in which the latter is on trial for allegedly receiving a bribe from the Briton in connection with the sale of F1 to CVC Capital Partners in 2006. Ecclestone insists that the payments of nearly £8m from his personal wealth and £22m from the Ecclestone family trust called Bambino were made to avoid risking a ruling against him by the UK tax authorities.

HMRC's interest in the case was awakened when Gribkowsky suggested that Ecclestone was more closely connected to Bambino than is understood, leaving the Briton open to an order to pay tax on its income, a figure that could run into billions of pounds. The fact that Ecclestone opted to pay his accuser off only served to pique interest a little more.

Ecclestone naturally insists that the payments did not constitute a bribe, but was made to prevent Gribkowsky coming out with that the Briton believes would be false accusations of tax evasion.

“Paying £8m is cheap compared to what it could have been - £2bn, or more,” Ecclestone told Britain's Sunday Telegraph newspaper, “The money was paid because there was this new thing going on with tax people, who could have turned around and said we think you owe us this money. That process could have taken two to three years. And they find a way to make you pay. If I was seen to be running the trust, then they could have made me pay.” ”

According to the Sunday Telegraph report, Ecclestone is also facing a civil claim in the UK which alleges that he and co-conspirators broke English and/or German law by making the payments to Gribkowsky, while the case is also expected to look into a $41.4m commission paid to Ecclestone by BayernLB bank, where Gribkowsky worked, which prosecutors suggest is suspicious.

“This is something that needs to be looked into and I am writing to the Attorney General to ask him whether he has looked at the case,” shadow attorney general, Emily Thornberry, told the report.

Meanwhile, Ecclestone's lawyer, Sven Thomas, claims that a 200-page legal submission made ahead of Wednesday's testimony will make clear that the near £30m payment by Ecclestone was not a bribe.

“You could say Bernie has been the victim here," Thomas insisted, "There was a hidden threat, a pressure - a sort of shakedown. Bambino wanted to ensure Bernie would continue as CEO because they believed, if he didn't, the value of their assets would come down. That is why separately they also paid Mr Gribkowsky.”

Thomas also believes that Wednesday's court appearance will explain that the five per cent 'commission' payment was made in exchange for warranties and guarantees given to CVC about the health of F1's balance sheet, as Ecclestone was liable for up to $100m because BayernLB was not prepared to be. The payment also included an amount to ensure that Ecclestone remained as CEO while scrapping a clause that effectively meant he could never be fired.

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JOHN - Unregistered

November 08, 2011 3:16 PM

A little bit of a surprise as the top (and filthy) rich are well looked after (legally) by top accountants and top lawyers. However Bernie's affairs are anything but just. It will be nonetheless very interesting to see how this plays out its course. Whether Bernie goes under or not matter not one iota to F1 which stopped being a 'sport' long ago. I am sure with all the power he has at his disposal he will do well.....it goes without saying that he must pay the correct amount of tax required by law, if he has not I hope HMRC come down on him like a ton of bricks. But that sadly goes for all the other top rich, then and only then can the government have more money - and reduce its national dept...........................

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