F1 boss paid €32m to avoid billions in tax bills
Published 10/11/2011 | 05:00
The Formula One boss, Bernie Ecclestone, admitted yesterday to paying a Munich banker €32m to stop him from making allegations about a family trust to Britain's Inland Revenue that he claimed could have made him liable for billions in back tax.
Mr Ecclestone (81) appeared as a key witness in a Munich court in what has been billed as Germany's biggest post-war corruption trial, involving payments and alleged bribery totalling more than €64m.
He told the court he paid the €32m to banker Gerhard Gribkowsky in 2006 to prevent him from making what he said were unfounded allegations that he controlled a family trust called Bambino.
He said he feared the allegations could have left him liable for back tax estimated at about £2bn (€2.35bn).
"It would have been a disaster for me. It was a risk I could not afford to take," he said.
"I thought that if he (Mr Gribkowsky) gets upset with me, he might do something quite vindictive.
"I thought if I give him the money, it might help to keep him quiet and peaceful and not do silly things."
The payment was made during the sale of Formula One in 2006. At the time, Mr Gribkowsky worked for the state-owned Bayerische Landesbank (BLB) and was in charge of the sale of BLB's Formula One stake.
Under the deal, Mr Ecclestone is alleged to have received the equivalent of £25.4m (€29.8m) from the BLB, with a further £15.5m (€18.21m) being paid into the Bambino trust.
Prosecutors have charged Mr Gribkowsky with bribery, corruption and tax evasion. He faces up to 10 years in jail if convicted.
The case relates to a large Formula One stake that BLB sold to a private equity company called QVC five years ago.
Mr Ecclestone told the court that Mr Gribkowsky had been fascinated by Formula One and had told him how he wanted get out of banking and start up business on his own, which would include a stake in motor racing. Mr Ecclestone said he told him, "We'll think about it".
"In fact, this was a British way of saying no," he said. (© Independent News Service)