By Christian Sylt and Caroline Reid
Sunday, 2 October 2011
GETTY IMAGES
Ecclestone will appear as a witness
Formula One boss Bernie Ecclestone has confirmed that he will be a witness in Germany's biggest post-war corruption trial which gets under way in Munich later this month.
On trial is German banker Gerhard Gribkowsky, who has been charged with receiving a $44m (£28m) bribe in connection with the sale of F1 to its current owner, CVC, in 2006.
Mr Gribkowsky was the chief risk officer of German bank BayernLB and was responsible for selling its 47.2 per cent stake in F1's holding company, SLEC. BayernLB received $814m from CVC for its F1 shares and in the two years following the sale Mr Gribkowsky was paid a total of $44m by Mr Ecclestone and his offshore family trust Bambino.
The money was paid into an account in Austria where it was taxed at a lower rate than in Germany where Mr Gribkowsky was resident. Since he did not declare the payment to the German authorities or BayernLB he has been charged with tax evasion and breach of trust. Prosecutors believe that Mr Ecclestone paid him the money to favour a sale to CVC, which had agreed to keep him as chief executive of F1, so they have also charged Mr Gribkowsky with receiving a bribe.
Mr Ecclestone says that CVC had no choice but to retain him and he denies paying any bribe in connection with the sale of F1. Neither CVC nor Mr Ecclestone have been charged and he says he paid Mr Gribkowsky because the banker threatened that he would otherwise make false allegations about his financial affairs to the Inland Revenue.
"I had a contract with BLB so they couldn't have fired me. [CVC] bought the contract so they had to take me as well," says Mr Ecclestone. "I'm going to be a witness in the trial. I have been to Munich and was questioned so I suppose they want to ask me the questions that I answered then. It's what would normally happen in a court. [F1's chief legal officer] Sacha Woodward-Hill has got to go too."
The prosecutors allege that Mr Gribkowsky was influenced by his financial arrangement with Mr Ecclestone, and so he agreed to sell without getting an external assessment of whether CVC was offering a fair price and without investigating other bids.
However, the indictment against Mr Gribkowsky says that although BayernLB had received several offers for its F1 shares, including one from US buyout fund Bluewater, "none of these offers were seen as suitable, in particular for price reasons". Mr Ecclestone says that "five people wanted to buy and made offers but [BayernLB] wouldn't sell so there's enough evidence that the shares were anything but undervalued."
It echoes recent comments made by BayernLB's chief financial officer, Stephan Winkelmeier. He said that an internal investigation by the bank's management and supervisory board, as well as external checks by auditors, "have shown that the sale was carried out properly, in accordance with the bank's regulations and with a price that was in line with expectations".
This could put the brakes on a lawsuit which was recently filed against Mr Ecclestone in London by another former part-owner of the sport. German media firm Constantin Medien claims it lost over $100m as a result of the sport being undervalued when it was sold to CVC.
In 2003 Constantin sold its 16.7 per cent stake in F1 to BayernLB and two other banks – JP Morgan and Lehman Brothers. It gave them a total of 75 per cent of F1 as they already owned 58.3 per cent of it which they took over in 2002 from media company Kirch when it defaulted on a $1.6bn loan they had given it to buy the stake.
Credit: The Independent (www.independent.co.uk)
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