F1 boss paid millions to silence banker

Formula One boss Bernie Ecclestone admitted yesterday to paying a Munich banker £27.5 million ($56 million) to stop him from making allegations about a family trust to the Inland Revenue which he claimed could have made him liable for billions in back tax.

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 £55 million.

He told the court he paid the £27.5 million 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 £2 billion. "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 [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 ..."

The payment was made during the sale of Formula One in 2006. At the time, 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, Ecclestone is alleged to have received the equivalent of £25.4 million from the BLB with a further £15.5 million being paid into the Bambino trust.

Prosecutors have charged 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 which BLB sold to a private equity company, QVC, five years ago. Ecclestone told the court Gribkowsky had been fascinated by Formula One and had told him how he wanted to get out of banking and start up business on his own, which would include a stake in motor racing.

The Formula One boss said he feared that if he failed to help the banker with his ambitions, he would make unfounded claims suggesting he was the sole controller of the multibillion-pound Bambino trust Ecclestone set up for his estranged wife.

Ecclestone said the taxman finally cleared him of any involvement with the trust in 2008.

Ecclestone insisted that if Gribkowsky had made the allegations, the Inland Revenue would have had no option but to investigate him. "The onus would have been on me to prove that I was innocent. It would have been a disaster. It was a risk I could not afford to take."

- Independent