Formula One: Ecclestone admits making payment to criminally charged banker

Bernie Ecclestone LAT PHOTOGRAPHIC
Bernie Ecclestone admitted to making a payment to a criminally charged banker

By QUENTIN SPURRING on 7/22/2011

Related Articles

  • Formula One: Webber grabs German GP pole, Vettel starts in third place

  • Wild Ride: Jenson Button drives McLaren F1 car around Moscow's streets

  • Formula One: News Corp. still silent about takeover bid

  • Formula One: Friday's FIA transcript for the German Grand Prix

  • Formula One: News Corp. scandal could derail F1 buyout bid

  • Formula One: Alonso delivers Ferrari's first win as pit mistake hobbles Vettel

  • Formula One: Renault likely to quit if engine rule change delayed

Formula One boss Bernie Ecclestone is defending his reputation after his name was mentioned in charges filed by the Munich state prosecutor in Germany against Gerhard Gribkowsky, a former chief risk officer of the state-owned Bayerische Landesbank, in connection with the sale of F1 five years ago.

Bayerische Landesbank (known as BayernLB) and two other banks, JP Morgan and Lehman Brothers, had acquired 75 percent of SLEC, the parent company of the F1 group, in 2002. The acquisition followed the collapse of Kirch, a German company that had used its F1 holding as collateral for loans totaling $1.6 billion. The remaining 25 percent was held by Bambino, an Ecclestone family offshore trust.

In 2006, the three banks and Bambino sold their shares to the CVC Capital Partners private equity firm, which still owns F1.

Gribkowsky was responsible for the sale of BayernLB's 47 percent stake. He has been in jail since January, when he was arrested in connection with that transaction. The office of the Staatsanwaltschaft München has now formally charged him with breach of trust, tax evasion and receiving “corrupt payments” from Ecclestone and Bambino totaling $44 million. The prosecutors added that Ecclestone remains “under investigation” for alleged bribery and abetting breach of trust.

For his part, Ecclestone has now admitted making the payments but continues to deny any wrongdoing.

Ecclestone stopped short of accusing Gribkowsky of outright blackmail, but he told London's Daily Telegraph newspaper that Gribkowsky made false allegations about Ecclestone's relationship with Bambino and implied that he could cause trouble for the F1 ringmaster with the United Kingdom's Revenue and Customs service.

“I have never had anything to do with the trust in any shape or form, [but Gribkowsky] threatened that he was going to say that I was running it,” Ecclestone claimed.

Ecclestone said he transferred his own shares in F1 to the trust because he was concerned that if he died, Slavica Ecclestone (his wife at the time) would have to pay inheritance tax because she had not lived in the United Kingdom long enough to be domiciled.

“The Revenue [office] obviously had to check everything,” he said. “They took five years going through that, and at the time [of the BayernLB transaction], they were in the middle of settling everything with the trust. The last thing you need is for them to start thinking something different. Nothing was wrong with the trust, nothing at all. [But Gribkowsky] was shaking me down, and I didn't want to take a risk.”

Ecclestone emphasized that Gribkowsky asked to borrow the money.

“He never said to me, ‘If you don't give me this, I will say that,'” he clarified.

Ecclestone stated that he asked his lawyers what would happen if Gribkowsky went to the Revenue office with his allegations.

“They said, ‘The Revenue would assess you, and you would have to defend it. You would be three years in court, and it would cost you a fortune. Better pay.'”

Ecclestone said that he then made the payments through offshore companies based in the British Virgin Islands and Mauritius. He explained that Gribkowsky “wanted to be paid so it didn't look like it came from me and didn't look like it came from England.”

Prosecutors stated that Gribkowsky set up and controlled two Austrian companies that recorded receipt of the money from sources named as “Bambino Trust” and “Bernard E.” They added, “According to the results of [our] investigations, this was bribery money, whose payment was disguised through two fake consulting contracts with [the companies] in Mauritius and the British Virgin Islands.”

The prosecutors further allege that in return, Gribkowsky committed BayernLB to paying $41.4 million to Ecclestone and $25 million to Bambino. Their statement continued, “These payments would not have been asked for were it not for the bribes to be paid to [Gribkowsky]. BayernLB incurred damages of almost $66.5 million through the conduct of the accused.”

However, Ecclestone also claims that the money he received at the deal's conclusion was bona fide commission.

“I never bribed anybody or paid any money to anybody in connection with the company,” he told the Daily Telegraph. I got 5 percent [commission] for the sale of the company. BayernLB approved the sale and approved the commission, which was cheap. There were no secrets.”

In a reference to an interview in April with public prosecutor Hildegard Baumler-Hosl, Ecclestone concluded by saying that he had already given all of these details to the prosecutors in person and that he expected to be cleared of any wrongdoing.

0 comments:

Related Posts Plugin for WordPress, Blogger...